Article ID Journal Published Year Pages File Type
957787 Journal of Economic Theory 2006 19 Pages PDF
Abstract

In perfect foresight dynamics, an action is linearly stable if expectation that people will always choose the action is self-fulfilling. A symmetric game is a PIM game if an opponent's particular action maximizes the incentive of an action, independently of the rest of the players. This class includes supermodular games, games with linear incentives and so forth. We show that, in PIM games, linear stability is equivalent to u-dominance, a generalization of risk-dominance, and that there is no path escaping a u-dominant equilibrium. Existing results on N-player coordination games, games with linear incentives and two-player games are obtained as corollaries.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Authors
,