Evolution, Expectations, and Drift

Fernando Vega‐Redondo

in Evolution, Games, and Economic Behaviour

Published in print September 1996 | ISBN: 9780198774723
Published online November 2003 | e-ISBN: 9780191596971 | DOI:
 Evolution, Expectations, and Drift

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This chapter closes the main body of the book (i.e. excluding a technical appendix). It addresses the issue of expectation formation and the endogenous evolution of alternative levels of sophistication in agents’ behaviour. This is applied to some of the contexts studied in previous chapters (e.g. coordination games and bargaining), where it is found to induce a certain embodiment of forward induction considerations.

Keywords: bargaining; coordination games; Drift; expectations; forward induction; Multistage Games; sophistication

Chapter.  18145 words.  Illustrated.

Subjects: Microeconomics

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