Stuart, McDonald and Liam, Wagner (2003): Using Simulated Annealing to Calculate the Trembles of Trembling Hand Perfection.

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Abstract
Within the literature on noncooperative game theory, there have been a number of algorithms which will compute Nash equilibria. This paper shows that the family of algorithms known as Markov chain Monte Carlo (MCMC) can be used to calculate Nash equilibria. MCMC is a type of Monte Carlo simulation that relies on Markov chains to ensure its regularity conditions. MCMC has been widely used throughout the statistics and optimization literature, where variants of this algorithm are known as simulated annealing. This paper shows that there is interesting connection between the trembles that underlie the functioning of this algorithm and the type of Nash refinement known as trembling hand perfection. This paper shows that it is possible to use simulated annealing to compute this refinement.
Item Type:  MPRA Paper 

Original Title:  Using Simulated Annealing to Calculate the Trembles of Trembling Hand Perfection 
Language:  English 
Keywords:  Trembling Hand Perfection, Equilibrium Selection and Computation, Simulated Annealing, Markov Chain Monte Carlo 
Subjects:  C  Mathematical and Quantitative Methods > C7  Game Theory and Bargaining Theory > C72  Noncooperative Games C  Mathematical and Quantitative Methods > C7  Game Theory and Bargaining Theory > C73  Stochastic and Dynamic Games ; Evolutionary Games ; Repeated Games 
Item ID:  89127 
Depositing User:  Dr Liam Wagner 
Date Deposited:  23 Sep 2018 01:21 
Last Modified:  26 Sep 2019 08:43 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/89127 