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Evolutionary Stability in the Investment-Opportunism-Retaliation Game
| Content Provider | Semantic Scholar |
|---|---|
| Author | Eaton, B. Curtis |
| Copyright Year | 2003 |
| Abstract | Synopsis: Can economically efficient outcomes be obtained and sustained in the absence of externally enforced property rights? We study the evolutionary properties of a game that exhibits two well-defined Nash equilibria: one generates an inefficient outcome while the other set generates an efficient outcome supported by the potential for retaliation. Although standard forward-looking refinements eliminate the efficient equilibrium, neither equilibrium type satisfies strict evolutionary stability criteria. However, both types of equilibrium define strategies that are neutrally stable, which makes them vulnerable to drift in dynamic environments. We conduct computer simulation experiments in which players learn adaptively via a tournament selection mechanism called sophisticated experimentation. Our simulations demonstrate that while the system spends a disproportionately high proportion of time in the inefficient equilibrium set, the efficient equilibrium is pervasive as the system drifts back and forth between the equilibrium sets, never settling on one or the other. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://econ.ucalgary.ca/fac-files/bce/Evolutionary-Stability.pdf |
| Language | English |
| Access Restriction | Open |
| Subject Keyword | Computer simulation DOS Exhibits as Topic Experiment Kind of quantity - Equilibrium Nash equilibrium Pervasive informatics Tournament selection Video synopsis |
| Content Type | Text |
| Resource Type | Article |
