Nash equilibrium leaves the impression that each player foresees perfectly and responds optimally. Must human-like, rational agents really acquire both these faculties? This paper argues that in some instances neither is ever needed. For the argument repeated play is modelled here as a constrained, decentralized, second-order process driven by noncoordinated pursuit of better payoffs. Some friction feeds into — and stabilizes — a fairly myopic mode of behavior. Convergence to equilibrium therefore obtains under weak and natural conditions. An important condition is that accumulation of marginal payoffs, along the path of play, yields a sum which is bounded above.

Newtonian Mechanics and Nash Play / Flam, S. D.; Morgan, Jacqueline. - In: INTERNATIONAL GAME THEORY REVIEW. - ISSN 0219-1989. - 6:(2004), pp. 181-194. [10.1142/S0219198904000149]

Newtonian Mechanics and Nash Play

MORGAN, JACQUELINE
2004

Abstract

Nash equilibrium leaves the impression that each player foresees perfectly and responds optimally. Must human-like, rational agents really acquire both these faculties? This paper argues that in some instances neither is ever needed. For the argument repeated play is modelled here as a constrained, decentralized, second-order process driven by noncoordinated pursuit of better payoffs. Some friction feeds into — and stabilizes — a fairly myopic mode of behavior. Convergence to equilibrium therefore obtains under weak and natural conditions. An important condition is that accumulation of marginal payoffs, along the path of play, yields a sum which is bounded above.
2004
Newtonian Mechanics and Nash Play / Flam, S. D.; Morgan, Jacqueline. - In: INTERNATIONAL GAME THEORY REVIEW. - ISSN 0219-1989. - 6:(2004), pp. 181-194. [10.1142/S0219198904000149]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11588/106792
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