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A note on control costs and logit rules for strategic games

Author

Listed:
  • Philippe Solal

    (CREUSET, University of Saint-Etienne, 42100 Saint-Etienne, France)

  • Hans Haller

    (Department of Economics, Virginia Polytechnic Institute and State, University, Blacksburg, VA 24061-0316, USA)

  • Richard Baron

    (CREUSET, University of Saint-Etienne, 42100 Saint-Etienne, France)

  • Jacques Durieu

    (CREUSET, University of Saint-Etienne, 42100 Saint-Etienne, France)

Abstract

We consider best response dynamics with endogenous noise based on a finite game in strategic form. A player can reduce the noise level by expending an extra effort and incurring some disutility or control costs. We specify control costs that result in logit adjustment rules. The stochastically stable states of the dynamic process are partial Nash configurations, that is, states where at least one player plays a best response against the others. If the game has a potential, then the stochastically stable states coincide with the Nash equilibria on which the potential is maximized.

Suggested Citation

  • Philippe Solal & Hans Haller & Richard Baron & Jacques Durieu, 2002. "A note on control costs and logit rules for strategic games," Journal of Evolutionary Economics, Springer, vol. 12(5), pages 563-575.
    • Handle: RePEc:spr:joevec:v:12:y:2002:i:5:p:563-575
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    Citations

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    Cited by:

    1. Philippe Solal & Jacques Durieu, 2005. "Interaction on Hypergraphs," Post-Print hal-00375568, HAL.
    2. Alós-Ferrer, Carlos & Netzer, Nick, 2010. "The logit-response dynamics," Games and Economic Behavior, Elsevier, vol. 68(2), pages 413-427, March.
    3. Siegfried Berninghaus & Hans Haller & Alexander Outkin, 2006. "Neural networks and contagion," Revue d'économie industrielle, De Boeck Université, vol. 0(2), pages 11-11.
    4. Berninghaus, Siegfried & Haller, Hans, 2007. "Pairwise interaction on random graphs," Papers 06-16, Sonderforschungsbreich 504.
    5. Jacques Durieu & Hans Haller & Philippe Solal, 2011. "Nonspecific Networking," Games, MDPI, vol. 2(1), pages 1-27, February.

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