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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 in the long run under 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 response 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 any 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 exist only in local interaction settings and favor the risk dominant strategy. Our result strengthens the equilibrium selection result of evolutionary game theory.
1555-0478
26-55
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
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 (2003) Contagion and state dependent mutations. Advances in Theoretical Economics, 3 (1), 26-55.

Record type: Article

Abstract

Early results of evolutionary game theory showed that the risk dominant equilibrium is uniquely selected in the long run under 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 response 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 any 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 exist only in local interaction settings and favor the risk dominant strategy. Our result strengthens the equilibrium selection result of evolutionary game theory.

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Published date: 2003

Identifiers

Local EPrints ID: 32978
URI: https://eprints.soton.ac.uk/id/eprint/32978
ISSN: 1555-0478
PURE UUID: c2effb3f-6a4c-4142-b009-a3cf50c0434b

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Date deposited: 15 May 2006
Last modified: 17 Jul 2017 15:54

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