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Implementation, Elimination of Weakly Dominated Strategies and Evolutionary Dynamics

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dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorCabrales, Antonio
dc.contributor.authorPonti, Giovanni
dc.date.accessioned2009-01-29T11:11:47Z
dc.date.available2009-01-29T11:11:47Z
dc.date.issued2000
dc.description.abstractThis paper studies convergence and stability properties of Sjöström’s (1994) mechanism, under the assumption that boundedly rational players find their way to equilibrium using monotonic learning dynamics and bestreply dynamics. This mechanism implements most social choice functions in economic environments using as a solution concept one round of deletion of weakly dominated strategies and one round of deletion of strictly dominated strategies. However, there are other sets of Nash equilibria, whose payoffs may be very different from those desired by the social choice function. With monotonic dynamics, all these sets of equilibria contain limit points of the learning dynamics. Furthermore, even if the dynamics converge to the “right” set of equilibria (i.e. the one which contains the solution of the mechanism), it may converge to an equilibrium which is worse in welfare terms. In contrast with this result, any interior solution of the best-reply dynamics converges to the equilibrium whose outcome the planner desires.
dc.format.mimetypeapplication/pdf
dc.identifier.urihttps://hdl.handle.net/10016/3535
dc.language.isoeng
dc.publisherInstituto Valenciano de Investigaciones Económicas
dc.relation.ispartofseriesWorking Papers;
dc.relation.ispartofseries2000_AD
dc.relation.publisherversionhttp://www.ivie.es/downloads/docs/wpasad/wpasad-2000-18.pdf
dc.rightsopenAccess
dc.rights.accessRightsopen access
dc.subjectImplementation Theory
dc.subjectEvolutionary Dynamics
dc.subjectBounded Rationality
dc.subject.jelC72
dc.subject.jelD70
dc.subject.jelD78
dc.titleImplementation, Elimination of Weakly Dominated Strategies and Evolutionary Dynamics
dc.typeworking paper*
dspace.entity.typePublication
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