A multinomial probit model of stochastic evolution

David P. Myatt, Chris Wallace

Research output: Contribution to journalArticlepeer-review

Abstract

A strategy revision process in symmetric normal form games is proposed. Following Kandori et al. (Econometrica 61 (1993) 29), members of a population periodically revise their strategy choice, and choose a myopic best response to currently observed play. Their payoffs are perturbed by normally distributed Harsanyian trembles, so that strategies are chosen according to multinomial probit probabilities. As the variance of payoffs is allowed to vanish, the graph theoretic methods of the earlier literature continue to apply. The distributional assumption enables a convenient closed form characterisation for the weights of the rooted trees. An illustration of the approach is offered, via a consideration of the role of dominated strategies in equilibrium selection.

Original languageEnglish
Pages (from-to)286-301
Number of pages16
JournalJournal of Economic Theory
Volume113
Issue number2
DOIs
Publication statusPublished - Dec 2003

Keywords

  • Dominated strategies
  • Idiosyncrasy
  • Multinomial probit
  • Stochastic evolution

Fingerprint

Dive into the research topics of 'A multinomial probit model of stochastic evolution'. Together they form a unique fingerprint.

Cite this