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Contagion and state dependent mutations

Contagion and state dependent mutations
Contagion and state dependent mutations
Early results of evolutionary game theory showed that the risk dominant equilibrium is uniquely selected on the long run by the best response dynamics with mutation. Bergin and Lipman (1996) qualified this result by showing that for a given population size the evolutionary process can select any strict Nash equilibrium if the probability of choosing a nonbest reply is state-dependent. This paper shows that the unique selection of the risk dominant equilibrium is robust with respect to state dependent mutation in local interaction games. More precisely, for a given mutation structure there exists a minimum population size beyond which the risk dominant equilibrium is uniquely selected. Our result is driven by contagion and cohesion among players, which exists only in local interaction settings and favors the play of the risk dominant strategy. Our result strengthens the equilibrium selection result of evolutionary game theory
27
University of Southampton
Lee, In Ho
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Szeidl, Adam
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Valentinyi, Akos
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Lee, In Ho
f9fa5dda-198f-4857-8fe5-82023a389d3c
Szeidl, Adam
d9acb041-a643-4f03-b5bd-7c68b94c6e15
Valentinyi, Akos
7519c19b-8434-4ba2-88a6-ae066471ffcf

Lee, In Ho, Szeidl, Adam and Valentinyi, Akos (2000) Contagion and state dependent mutations (Discussion Papers in Economics and Econometrics, 27) Southampton, UK. University of Southampton 23pp.

Record type: Monograph (Discussion Paper)

Abstract

Early results of evolutionary game theory showed that the risk dominant equilibrium is uniquely selected on the long run by the best response dynamics with mutation. Bergin and Lipman (1996) qualified this result by showing that for a given population size the evolutionary process can select any strict Nash equilibrium if the probability of choosing a nonbest reply is state-dependent. This paper shows that the unique selection of the risk dominant equilibrium is robust with respect to state dependent mutation in local interaction games. More precisely, for a given mutation structure there exists a minimum population size beyond which the risk dominant equilibrium is uniquely selected. Our result is driven by contagion and cohesion among players, which exists only in local interaction settings and favors the play of the risk dominant strategy. Our result strengthens the equilibrium selection result of evolutionary game theory

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Published date: 2000

Identifiers

Local EPrints ID: 33125
URI: http://eprints.soton.ac.uk/id/eprint/33125
PURE UUID: 3ef6ac7a-693c-4750-8bfc-1c478e2e4317

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Date deposited: 18 Jul 2006
Last modified: 15 Mar 2024 07:42

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Contributors

Author: In Ho Lee
Author: Adam Szeidl
Author: Akos Valentinyi

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