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Long-run equilibria, dominated strategies, and local interactions

Weidenholzer, Simon Long-run equilibria, dominated strategies, and local interactions. [UNSPECIFIED]

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Abstract

The present note revisits a result by Kim and Wong (2010) showing that any strict Nash equilibrium of a coordination game can be supported as a long run equilibrium by properly adding dominated strategies. We show that in the circular city model of local interactions the selection of 1/2 -dominant strategies remains when adding strictly dominated strategies if interaction is decentral". Conversely, if the local interaction structure is central" by adding properly suited dominated strategies any equilibrium strategy of the original game can be supported as long run equilibrium. Classification- JEL: C72, D83

Item Type: UNSPECIFIED
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 27 Jun 2012 15:12
Last Modified: 17 Aug 2017 18:12
URI: http://repository.essex.ac.uk/id/eprint/2631

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