Stability and trembles in extensive-form games

Heller, Yuval (2013): Stability and trembles in extensive-form games.

Abstract

A leading solution concept in the evolutionary study of extensive-form games is Selten's (1983) (selten1983evolutionary) notion of limit ESS. We demonstrate that a limit ESS does not imply neutral stability, and that it may be dynamically unstable (almost any small perturbation takes the population away). These problems arise due to an implicit assumption that “mutants” are arbitrarily rare relative to “trembling” incumbents. Finally, we present a novel definition that solves this issue and has appealing properties.

• Item Type: MPRA Paper
• Language: English
• Keywords: Limit ESS, evolutionary stability, extensive-form games.
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C73 - Stochastic and Dynamic Games ; Evolutionary Games ; Repeated Games

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