A note on control costs and logit rules for strategic games |
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Authors: | Richard Baron Jacques Durieu Hans Haller Philippe Solal |
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Institution: | (1) CREUSET, University of Saint-Etienne, 42100 Saint-Etienne, France , FR;(2) Department of Economics, Virginia Polytechnic Institute and State, University, Blacksburg, VA 24061-0316, USA (e-mail: haller@vt.edu) , US |
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Abstract: | We consider best response dynamics with endogenous noise based on a finite game in strategic form. A player can reduce the
noise level by expending an extra effort and incurring some disutility or control costs. We specify control costs that result
in logit adjustment rules. The stochastically stable states of the dynamic process are partial Nash configurations, that is,
states where at least one player plays a best response against the others. If the game has a potential, then the stochastically
stable states coincide with the Nash equilibria on which the potential is maximized.
RID="*"
ID="*" Instructive comments of a referee are gratefully acknowledged.
Correspondence to:H. Haller |
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Keywords: | : Stochastic best response dynamics – Evolutionary games |
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