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T-Space at The University of Toronto Libraries >
Theoretical Economics >
Volume 3, Number 2 (June 2008) >

Please use this identifier to cite or link to this item: http://hdl.handle.net/1807/10424

Title: Monotone methods for equilibrium selection under perfect foresight dynamics
Authors: Daisuke Oyama; Graduate School of Economics, Hitotsubashi University
Satoru Takahashi; Department of Economics, Princeton University
Josef Hofbauer; Department of Mathematics, University of Vienna
Keywords: Equilibrium selection, perfect foresight dynamics, supermodular game, strategic complementarity, stochastic dominance, potential, monotone potential
C72, C73
Issue Date: 1-Jun-2008
Publisher: Theoretical Economics
Citation: Theoretical Economics; Vol 3, No 2 (2008)
Abstract: [This item is a preserved copy. To view the original, visit http://econtheory.org/] This paper studies a dynamic adjustment process in a large society of forward-looking agents where payoffs are given by a normal form supermodular game. The stationary states of the dynamics correspond to the Nash equilibria of the stage game. It is shown that if the stage game has a monotone potential maximizer, then the corresponding stationary state is uniquely linearly absorbing and globally accessible for any small degree of friction. A simple example of a unanimity game with three players is provided where there are multiple globally accessible states for a small friction.
URI: http://hdl.handle.net/1807/10424
Other Identifiers: http://econtheory.org/ojs/index.php/te/article/view/20080155
Rights: Authors who publish in <i>Theoretical Economics</i> will release their articles under the <a href="http://creativecommons.org/licenses/by-nc/2.5/">Creative Commons Attribution-NonCommercial license</a>. This license allows anyone to copy and distribute the article for non-commercial purposes provided that appropriate attribution is given.
Appears in Collections:Volume 3, Number 2 (June 2008)

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