Stability in Games with Continua of Equilibria

Printer-friendly version
Sebastian Bervoets, Mathieu Faure
Journal of Economic Theory
The stability of Nash equilibria has often been studied by examining the asymptotic behavior of the best-response dynamics. This is generally done in games where interactions are global and equilibria are isolated. In this paper, we analyze stability in contexts where interactions are local and where there are continua of equilibria. We focus on the public good game played on a network, where the set of equilibria is known to depend on the network structure (Bramoullé and Kranton (2007)), and where, as we show, continua of equilibria often appear. We provide necessary and sufficient conditions for a component of Nash equilibria to be asymptotically stable vis-à-vis the best-response dynamics. Interestingly, we demonstrate that these conditions relate to the structure of the network in a simple way. We also provide corresponding results for several dynamical systems related to the best response.
Developed by Paolo Gittoi