The target projection dynamic

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Abstract

We study the target projection dynamic, a model of learning in normal form games. The dynamic is given a microeconomic foundation in terms of myopic optimization under control costs due to a certain status-quo bias. We establish a number of desirable properties of the dynamic: existence, uniqueness and continuity of solution trajectories, nash stationarity, positive correlation with payoffs, and innovation. Sufficient conditions are provided under which strictly dominated strategies are wiped out. Finally, some stability results are provided for special classes of games.
Original languageEnglish
Pages (from-to)708-719
Number of pages12
JournalGames and Economic Behavior
Volume67
Issue number2
DOIs
Publication statusPublished - 1 Jan 2009

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