Contagion and State Dependent Mutations
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In Ho Lee
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.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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- On Non-responsiveness in Adverse Selection Models with Common Value
- Contributions Article
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- Advances Article
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Articles in the same Issue
- Topics Article
- Non-robustness of some economic models
- Incentives for Boundedly Rational Agents
- On Non-responsiveness in Adverse Selection Models with Common Value
- Contributions Article
- Competitive Equilibria With Incomplete Markets and Endogenous Bankruptcy
- A One-Period Version of Rubinstein's Bargaining Game
- Upgrading, Degrading, and Intertemporal Price Discrimination
- Adverse Selection and Insurance Contracting: A Rank-Dependent Utility Analysis
- Incomplete Contracts with Cross-Investments
- Communication and Voting with Double-Sided Information
- Signal Jamming in Games with Multiple Senders
- Homothetic or Cobb-Douglas Behavior Through Aggregation
- Advances Article
- The Generalized Linear Production Model: Solvability, Nonsubstitution and Productivity Measurement
- Contagion and State Dependent Mutations
- Rationalization and Incomplete Information
- Contractual Externalities and Common Agency Equilibria
- Market Research and Market Design
