Year: 2009
Type: article
Abstract: We investigate the long-run behavior of a stochastic replicator process, which describes game dynamics for a symmetric two-player game under aggregate shocks. We establish an averaging principle that relates time averages of the process and Nash equilibria of a suitably modified game. Furthermore, a sufficient condition for transience is given in terms of mixed equilibria and definiteness of the payoff matrix. We also present necessary and sufficient conditions for stochastic stability of pure equilibria.
DOI: 10.1214/08-aap577
Authors: Josef Hofbauer, Lorens A. Imhof
Language: English
Topic: Game Theory and Applications
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1966260878