Perfect Foresight and Equilibrium Selection in Symmetric Potential Games

The equilibrium selection approach of Matsui and Matsuyama (J. Econ. Theory65(1995), 415–434) which is based on rational players who maximize their discounted future payoff, is analyzed for symmetric two-player games with a potential function. It is shown that the maximizer of the potential function is the unique state that is absorbing and globally accessible for small discount rates.Journal of Economic LiteratureClassification Number: C72.

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