An Equilibrium Selection with Payo ̄ -Dependent Mistakes£
نویسنده
چکیده
This paper studies properties of equilibrium selection based on quantal response equilibrium (QRE) models (McKelvey and Palfrey, Games and Economic Behavior 10 (1995), 6-38). In a QRE, the chances of playing sub-optimal strategies by mistakes are proportional to expected payo ̄ s, and QRE produces a distinct prediction from other noise-based re§ nements. A selection based on QRE coincides with risk-dominant equilibrium in 2∙2 games but in many-action games it selects the equilibrium that is most robust to deviations being expected with high probabilities. Journal of Economic Literature Classi§ cation Number: C70
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