Monotone Methods for Equilibrium Selection under Perfect Foresight Dynamics
نویسندگان
چکیده
This paper studies a dynamic adjustment process in a large society of forward-looking agents where payoffs are given by a normal form supermodular game. The stationary states of the dynamics correspond to the Nash equilibria of the stage game. It is shown that if the stage game has a monotone potential maximizer, then the corresponding stationary state is uniquely linearly absorbing and globally accessible for any small degree of friction. Among binary supermodular games, a simple example of a unanimity game with three players is provided where there are multiple globally accessible states for a small friction. Journal of Economic Literature Classification Numbers: C72, C73.
منابع مشابه
Daisuke Oyama
This paper studies equilibrium selection in supermodular games based on perfect foresight dynamics. A normal form game is played repeatedly in a large society of rational agents. There are frictions: opportunities to revise actions follow independent Poisson processes. Each agent forms his belief about the future evolution of the action distribution in the society, and takes an action that maxi...
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