Evolution of equilibria in the long run: a general theory and applications
Article Abstract:
M. Kandori, G. Mailath and R. Rob's evolutionary process is extended to n x n games. Players shifting toward the best response against the strategy's current configuration and players trying out alternative strategies are behind the evolutionary process. The long-run equilibrium is shown to develop in spite of multiple equilibria in the game. A general algorithm is given for long-run equilibrium (LRE) calculations and applied to a pair of economic game classes. The LRE is shown to be the Pareto-efficient equilibrium in pure coordination games. The best-response correspondence's geometry can be used to identify the LRE in games that have strategic complementarities.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1995
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On renegotiation-proof equilibrium under imperfect monitoring
Article Abstract:
E. van Damme showed in his work that the weakly renegotiation-proof equilibrium (WRPE) will play the stage game Cournot equilibrium in E. Green and R. Porter's imperfect monitoring model. An attempt is made to uncover a restriction that a WRPE will impose on actions in the stage game. The stage game restriction is then used to explain errors in van Damme's conclusions and show that his argument is not applicable. The WRPE is shown to be incapable of attaining the monopolistic profit.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1995
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Consumer inertia, firm growth and industry dynamics
Article Abstract:
A model of firm size, based on the hypothesis that consumers are "locked in", is developed because of search costs with firms patronized in the past. As a result, older firms have a larger clientele and are able to extract higher profits.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 2003
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