Log-linear dynamics and local potential

We show that local potential maximizer ([15]) with constant weights is stochastically stable in the log-linear dynamics provided that the payoff function or the associated local potential function is supermodular. We illustrate and discuss, through a series of examples, the use of our main results as well as other concepts closely related to local potential maximizer: weighted potential maximizer, pdominance. We also discuss the log-linear processes where each player’s stochastic choice rule converges to the best response rule at different rates. For 2× 2 games, we examine a modified log-linear dynamics (relative log-linear dynamics) under which local potential maximizer with strictly positive weights is stochastically stable. This in particular implies that for 2 × 2 games a strict (p1, p2)-dominant equilibrium with p1 + p2 < 1 is stochastically stable under the new dynamics. (Journal of Economic Literature Classification Number: C72, C73)