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.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.