Equilibrium selection via replicator dynamics in coordination games

B Zhang, J Hofbauer - International Journal of Game Theory, 2015 - Springer
B Zhang, J Hofbauer
International Journal of Game Theory, 2015Springer
This paper studies two equilibrium selection methods based on replicator dynamics. A Nash
equilibrium is called centroid dominant if the trajectory of the replicator dynamics starting at
the centroid of the strategy simplex converges to it. On the other hand, an equilibrium is
called basin dominant if it has the largest basin of attraction. These two concepts are
compared with risk dominance in the context of 2 * 2 2× 2 bimatrix coordination games. The
main results include (a) if a Nash equilibrium is both risk dominant and centroid dominant, it …
Abstract
This paper studies two equilibrium selection methods based on replicator dynamics. A Nash equilibrium is called centroid dominant if the trajectory of the replicator dynamics starting at the centroid of the strategy simplex converges to it. On the other hand, an equilibrium is called basin dominant if it has the largest basin of attraction. These two concepts are compared with risk dominance in the context of bimatrix coordination games. The main results include (a) if a Nash equilibrium is both risk dominant and centroid dominant, it must have the largest basin of attraction, (b) the basin dominant equilibrium must be risk dominant or centroid dominant.
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