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On the learning and stability of mixed strategy Nash equilibria in games of strategic substitutes

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  • Hoffmann, Eric

Abstract

This paper analyzes the learning and stability of mixed strategy Nash equilibria in games of strategic substitutes (GSS), complementing recent work done in the case of strategic complements (GSC). Mixed strategies in GSS are of particular interest because it is well known that such games need not exhibit pure strategy Nash equilibria. First, we establish bounds on the strategy space which indicate where randomizing behavior may occur in equilibrium. Second, we show that mixed strategy Nash equilibria are generally unstable under a wide variety of learning rules. Multiple examples are given.

Suggested Citation

  • Hoffmann, Eric, 2016. "On the learning and stability of mixed strategy Nash equilibria in games of strategic substitutes," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 349-362.
    • Handle: RePEc:eee:jeborg:v:130:y:2016:i:c:p:349-362
    DOI: 10.1016/j.jebo.2016.07.012
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    More about this item

    Keywords

    Single-crossing property; Mixed strategies; Stability;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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