TY - JOUR
T1 - Experimentation, Imitation, and Stochastic Stability
AU - Gale, Douglas
AU - Rosenthal, Robert W.
N1 - Funding Information:
* We are indebted to Yossi Feinberg, Daniel Goroff, J. Michael Harrison, Glenn Loury, Ramon Marimon, Michael Manove, Debraj Ray, Peter Sorensen, Charles Wilson, referees, a diligent associate editor, and participants at many seminars for helpful comments; to Bhaskar Chattaraj, Xianghai Ma, and Sumon Majumdar for invaluable research assistance; and to the National Science Foundation for financial support.
PY - 1999/1
Y1 - 1999/1
N2 - Do boundedly rational agents repeatedly playing a symmetric game with a unique symmetric equilibrium learn over time to play it? In this paper we model the dynamic interaction of two types of such agents, experimenters and imitators, whose behavior is characterized by simple rules of thumb. We find that the stochastic process describing their play isstable in the large: it converges globally and with probability one to a compact neighborhood of the equilibrium. However, its local behavior near the equilibrium depends in interesting ways on the details of the model.Journal of Economic LiteratureClassification Number: D83.
AB - Do boundedly rational agents repeatedly playing a symmetric game with a unique symmetric equilibrium learn over time to play it? In this paper we model the dynamic interaction of two types of such agents, experimenters and imitators, whose behavior is characterized by simple rules of thumb. We find that the stochastic process describing their play isstable in the large: it converges globally and with probability one to a compact neighborhood of the equilibrium. However, its local behavior near the equilibrium depends in interesting ways on the details of the model.Journal of Economic LiteratureClassification Number: D83.
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U2 - 10.1006/jeth.1998.2477
DO - 10.1006/jeth.1998.2477
M3 - Article
AN - SCOPUS:0002950841
SN - 0022-0531
VL - 84
SP - 1
EP - 40
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 1
ER -