Efficiency and stochastic stability in normal form games

Man, Priscilla T. Y. (2012) Efficiency and stochastic stability in normal form games. Games and Economic Behavior, 76 1: 272-284. doi:10.1016/j.geb.2012.06.005

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Author Man, Priscilla T. Y.
Title Efficiency and stochastic stability in normal form games
Journal name Games and Economic Behavior   Check publisher's open access policy
ISSN 0899-8256
1090-2473
Publication date 2012-06
Sub-type Article (original research)
DOI 10.1016/j.geb.2012.06.005
Open Access Status
Volume 76
Issue 1
Start page 272
End page 284
Total pages 13
Place of publication Maryland Heights, MO, United States
Publisher Academic Press
Collection year 2013
Language eng
Abstract Standard evolutionary game models select the risk-dominant equilibrium, even if it is not efficient. On the other hand, Robson [A.J. Robson, 1990. Efficiency in evolutionary games: Darwin, Nash and the secret handshake, J. Theoret. Biol. 144, 379-396] argues that genes can achieve efficient outcomes with a payoff-irrelevant type, even if such outcomes are not Nash. This paper follows Robson's approach but assumes that a more complex mutation in both the type and the behavior is an order of magnitude less likely than a simpler mutation in only the type or the behavior. In weakly acyclic games, every long-run stable strategy profile is a strict Nash equilibrium. Meanwhile, a Pareto undominated strict Nash equilibrium is stochastically stable if for each player, the opponents' equilibrium action profile uniquely maximizes his payoff given his equilibrium action. These results can be generalized to generic cyclic two-person games. In a common interests game, a strategy profile is selected if and only if it yields the unique Pareto efficient payoff vector.
Keyword Efficiency
Evolutionary game
Secret handshake
Stochastic stability
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ
Additional Notes Available online: 19 June 2012.

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2013 Collection
School of Economics Publications
 
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Created: Tue, 10 Jul 2012, 16:30:34 EST by Alys Hohnen on behalf of School of Economics