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Equilibrium Selection and the Rate of Convergence in Coordination Games with Simultaneous Play

Author

Listed:
  • Flavio M. Menezes

    (Australian National University)

  • Paulo K. Monteiro

    (Institute of Economics, University of Copenhagen)

  • Akram Temimi

    (University of Alabama)

Abstract
We apply the dynamic stochastic framework proposed in the recent evolutionary literature to a class of coordination games played simultaneously by the entire population. In these games, payoffs whence best replies are determined by a summary statistic of the population strategy profile. We demonstrate that with simultaneous play, the equilibrium selection depends crucially on how best responses to the summary statistic remain piece-wise constant. In fact, all the strict Nash equilibria in the underlying stage game can be declared stochastically stable depending on how the best response mapping generates piece-wise constant best responses. Furthermore, we show that if the best response mapping is sufficiently asymmetric, the expected waiting time until the unique stochastically stable state is reached is of the same order as the mutation rate, even in the limit as the population size grows to infinity.

Suggested Citation

  • Flavio M. Menezes & Paulo K. Monteiro & Akram Temimi, 1998. "Equilibrium Selection and the Rate of Convergence in Coordination Games with Simultaneous Play," Discussion Papers 98-14, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:9814
    as

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    File URL: http://www.econ.ku.dk/english/research/publications/wp/1998/9814.pdf/
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    equilibrium selection; stochastic stability; waiting time; rate of convergence;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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