A dynamic homotopy interpretation of the logistic quantal response equilibrium correspondence

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Abstract

This paper uses properties of the logistic quantal response equilibrium correspondence to compute Nash equilibria in finite games. It is shown that branches of the correspondence may be numerically traversed efficiently and securely. The method can be implemented on a multicomputer, allowing for application to large games. The path followed by the method has an interpretation analogous to that of Harsanyi and Selten's Tracing Proecdure. As an application, it is shown that the principal branch of any quantal response equilibrium correspondence satisfying a monotonicity property converges to the risk-dominant equilibrium in 2 × 2 games.
Original languageEnglish
Pages (from-to)243-263
Number of pages21
JournalGames and Economic Behavior
Volume51
Issue number2
DOIs
Publication statusPublished - May 2005

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