Evolution and refinement with endogenous mistake probabilities
by
Eric van Damme
Center for Economic Research, Tilburg University
Coauthors: Jorgen Weibull (Stockholm School of Economics)

Bergin and Lipman (1996) show that the refinement effect from the random mutations in the adaptive population dynamics in Kandori, Mailath and Rob (1993) and Young (1993) is due to restrictions on how these mutation rates vary across population states. We here model mutation rates as endogenously determined mistake probabilities, by assuming that players with some effort can control the probability of implementing the intended strategy. This is shown to corroborate the results in Kandori-Mailath-Rob (1993) and, under certain regularity conditions, those in Young (1993). The approach also yields a new refinement of the Nash equilibrium concept that is logically independent of Selten's (1975) perfection concept and Myerson's (1978) properness concept.

Date received: June 9, 2000

Copyright © 2000 by the author(s). The author(s) of this document and the organizers of the conference have granted their consent to include this abstract in Atlas Conferences Inc. Document # cafi-35.