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A Dynamic Homotopy Interpretation of Quantal Response Equilibrium Correspondences

Theodore Turocy ()

Game Theory and Information from University Library of Munich, Germany

Abstract: This paper uses properties of the logistic quantal response equilibrium correspondence to compute Nash equilibria in nite games. It is shown that branches of the correspondence may be numerically traversed e ciently and securely. The method can be implemented on a multicomputer, allowing for application to large games. The path followed by the method has an interpretation analogous to Harsanyi and Selten's Tracing Procedure. As an application, it is shown that the principal branch of any quantal response equilibrium correspondence satisfying a monotonicity property converges to the risk-dominant equilibrium in 2x2 games.

Keywords: noncooperative games; computation of Nash equilibrium; quantal response; logit equilibrium. (search for similar items in EconPapers)
JEL-codes: C72 C88 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2002-12-02, Revised 2003-10-16
New Economics Papers: this item is included in nep-gth
Note: Type of Document - PDF; prepared on Linux; pages: 26 ; figures: none
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