Abstract We examine an evolutionary process based on an explicit model of choice in which agents occasionally make mistakes in choosing their strategies. If the population size is sufficiently large, then the deterministic replicator dynamics provides a good approximation of the behavior of the system over finite time periods. The limiting behavior of the process is captured by combinatorial techniques introduced by Freidlin and Wentzell and popularized by Young and Kandori, Mailath, and Rob. We find conditions under which the limiting distribution selects the risk-dominant equilibrium in a 2 × 2 game and conditions under which the payoff-dominant equilibrium is selected. Journal of Economic Literature Classification Numbers: C70, C72.
[1]
Ken Binmore,et al.
Muddling Through: Noisy Equilibrium Selection☆
,
1997
.
[2]
Ken Binmore,et al.
Learning to be imperfect: The ultimatum game
,
1995
.
[3]
Ted Temzelides,et al.
Evolution, coordination, and banking panics
,
1997
.
[4]
Angelo Antoci,et al.
A public contracting evolutionary game with corruption
,
1995
.
[5]
L. Samuelson,et al.
Evolutionary Drift and Equilibrium Selection
,
2010
.
[6]
F. Vega-Redondo,et al.
Efficient Equilibrium Selection in Evolutionary Games with Random Matching
,
1996
.