The evolution of mixed conjectures in the rent-extraction game
Paulo Brito (),
Bipasa Datta and
Huw Dixon
Discussion Papers from Department of Economics, University of York
Abstract:
This paper adopts an evolutionary perspective on the rent-extraction model with conjectural variations (CV). We analyze the global dynamics of the model with three CVs under the replicator equation. We find that the end points of the evolutionary dynamics include the pure-strategy consistent CVs. However, there are also mixed-strategy equilibria that occur. These are on the boundaries between the basins of attraction of the pure-strategy sinks. We develop a more general notion of consistency which applies to mixed-strategy equilibria. In a three conjecture example, we find that in contrast to the pure-strategy equilibria, the mixed-strategy equilibria are not ESS: under the replicator dynamics, there are three or four mixed equilibria that may either be totally unstable, or saddle-stable. There also exist heteroclinic orbits that link equilibria together.
Keywords: Rent-extraction; evolutionary dynamics; consistent conjectures; global dynamics; mixed-strategy. (search for similar items in EconPapers)
JEL-codes: D03 H0 L15 (search for similar items in EconPapers)
Date: 2011-04
New Economics Papers: this item is included in nep-evo and nep-gth
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https://www.york.ac.uk/media/economics/documents/discussionpapers/2011/1106.pdf Main text (application/pdf)
Related works:
Working Paper: The evolution of mixed conjectures in the rent-extraction game (2012) 
Working Paper: The evolution of the mixed conjectures in the rent-extraction game (2012) 
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Persistent link: https://EconPapers.repec.org/RePEc:yor:yorken:11/06
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