On the Relationship Between Risk-Dominance and Stochastic Stability

Arbeitspapier

In a 2 x2 symmetric game with two symmetric equilibria in pure strategies, one risk-dominates another if and only if the equilibrium strategy is a unique best response to any mixture that gives it at least a probability of one half. In a n x n symmetric game, we call a strategy globally risk-dominant if it is a unique best response to any mixture that gives it at least a probability of one half. We show that if a finite coordination game has a globally risk-dominant equilibrium then this is the one that is selected by the stochastic equilibrium selection processes proposed by Young and by Kandori, Mailath, and Rob.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper ; No. 1122

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Maruta, Toshimasa
• Event: Veröffentlichung
• (who): Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science
• (where): Evanston, IL
• (when): 1995

Further information

• Handle: http://hdl.handle.net/10419/221478
• Last update: 10.03.2025, 11:43 AM CET