Abstract:

It is shown by example that learning rules of the fictitious play type fail to converge in certain kinds of coordination games. Variants of fictitious play in which past actions are eventually forgotten and that incorporate small stochastic perturbations are better behaved for this class of games: over the long run, players coordinate with probability one. Journal of Economic Literature Classification Numbers: C70, C72. Copyright 1998 Academic Press.

Language: English

Document Type: Research article

Affiliations: 1: The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, 19104-6302 2: Department of Economics, Johns Hopkins University, Baltimore, Maryland, 21218