Stability and Trembles in Extensive-Form Games

9 Pages Posted: 11 Jul 2013 Last revised: 29 Oct 2013

Date Written: October 29, 2013

Abstract

A leading solution concept in the evolutionary study of extensive-form games is Selten's (1983) notion of limit ESS. We demonstrate that a limit ESS does not imply neutral stability, and that it may be dynamically unstable (almost any small perturbation takes the population away). These problems arise due to an implicit assumption that “mutants” are arbitrarily rare relative to “trembling” incumbents. Finally, we present a novel definition that solves this issue and has appealing properties.

Keywords: Limit ESS, evolutionary stability, extensive-form games

JEL Classification: C73

Suggested Citation

Heller, Yuval, Stability and Trembles in Extensive-Form Games (October 29, 2013). Games and Economic Behavior, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2291435 or http://dx.doi.org/10.2139/ssrn.2291435

Yuval Heller (Contact Author)

Bar Ilan University ( email )

Dept. of Economics, Building 504
Bar Ilan University
Ramat Gan, 5290002
Israel
+972 5252 82182 (Phone)

HOME PAGE: http://https://sites.google.com/site/yuval26/

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