Prospect dynamics and loss dominance

• 成果类型: Article
• 署名作者: Sawa, Ryoji; Wu, Jiabin
• 署名单位: University of Tsukuba; University of Oregon
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2018.07.006
• 发表日期: 2018
• 页码: 98-124
• 关键词: Evolutionary game theory; Behavioral game theory; equilibrium selection; Loss-aversion; Prospect dynamic; Loss-dominance; Risk-dominance; Half-dominance; Maximin

摘要

This paper investigates the role of loss-aversion in affecting the long-run equilibria of stochastic evolutionary dynamics. We consider a finite population of loss-averse agents who are repeatedly and randomly matched to play a symmetric two-player normal form game. When an agent revises her strategy, she compares the payoff from each strategy to a reference point. Under the resulting dynamics, called prospect dynamics, risk-dominance is no longer sufficient to guarantee stochastic stability in 2 x 2 coordination games. We propose a stronger concept, loss-dominance: a strategy is loss-dominant if it is risk dominant and a maximin strategy. In 2 x 2 coordination games, the state where all agents play the loss-dominant strategy is uniquely stochastically stable under prospect dynamics for any degree of loss-aversion and all types of reference points. For symmetric two-player normal form games, a generalized concept, generalized loss-dominance, gives a sufficient condition for stochastic stability under prospect dynamics. (C) 2018 Elsevier Inc. All rights reserved.