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Stability and trembles in extensive-form games

Heller, Yuval (2013): Stability and trembles in extensive-form games. Forthcoming in: Games and Economic Behaivor No. forthcoming

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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.

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