Implementation, Elimination of Weakly Dominated Strategies and Evolutionary Dynamics

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dc.contributor.author Cabrales, Antonio
dc.contributor.author Ponti, Giovanni
dc.date.accessioned 2009-05-27T14:02:48Z
dc.date.available 2009-05-27T14:02:48Z
dc.date.issued 2000
dc.identifier.bibliographicCitation Review of Economic Dynamics. 2000, vol.3, nº 2 p. 247-282
dc.identifier.issn 1094-2025
dc.identifier.uri http://hdl.handle.net/10016/4310
dc.description.abstract This paper studies convergence and stability properties of T. Sjöström's (1994, Games Econom. Behav.6, 502–511) mechanism, under the assumption that boundedly rational players find their way to equilibrium using monotonic evolutionary dynamics and best-reply 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 evolutionary 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.mimetype application/pdf
dc.language.iso eng
dc.publisher Elsevier
dc.rights © Elsevier
dc.subject.other implementation theory
dc.subject.other evolutionary dynamics
dc.subject.other bounded rationality
dc.title Implementation, Elimination of Weakly Dominated Strategies and Evolutionary Dynamics
dc.type article
dc.type.review PeerReviewed
dc.description.status Publicado
dc.relation.publisherversion http://dx.doi.org/10.1006/redy.1999.0082
dc.subject.eciencia Economía
dc.identifier.doi 10.1006/redy.1999.0082
dc.rights.accessRights openAccess
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