Microeconomics B Second Semester 2014 Lecture 2 Dominance , Rationalizability , and Nash Equilibrium

Core Discussion Paper 9833 on Nash Equivalence Classes of Generic Normal Form Games

We introduce a procedure that uses basic topological characteristics of equilibrium correspondences of standard equilibrium concepts, to define broad equivalence classes of finite generic games in normal form. The proposed procedure is viewed as a potentially useful way of both organizing the underlying spaces of games as well as of comparing different equilibrium concepts with each other. The ...

Evolutionary Stability in Asymmetric Games *

We examine dynamic models of evolutionary selection processes on asymmetric two-player games. Conditions are established under which dynamic selection processes will yield outcomes that respect iterated strict dominance. The addition of a stability requirement ensures that outcomes will be Nash equilibria. However, we find that stable outcomes need not respect weak dominance, and hence need not...

Economics 703 Advanced Microeconomics Prof. Peter Cramton Lecture Note 2: Dynamics

The central idea of a Nash equilibrium is that each player must act optimally given the other players' strategies, i.e., play a best response to the others' strategies. Nash, however, only applies this optimality condition at the beginning of the game. Hence, some Nash equilibria of dynamic games involve incredible threats. Consider the game below. 1: 1 2 2: 3 0 4 0 2 1 l r l r L R 2 1 2 The pu...

Solution Concepts

These notes discuss some of the central solution concepts for normal-form games: Nash and correlated equilibrium, iterated deletion of strictly dominated strategies, rationalizability, and self-confirming equilibrium. Nash equilibrium captures the idea that players ought to do as well as they can given the strategies chosen by the other players. There are two pure Nash equilibria (B, B) and (F,...

Economics 6030 Microeconomic Theory Second Semester 2014 Lecture 5 Perfect Equilibrium of the Agent Normal Form and Sequential Equilibrium