The evolution of consistent conjectures

Dixon, Huw David ORCID: https://orcid.org/0000-0002-9875-8965 and Somma, Ernesto 2003. The evolution of consistent conjectures. Journal of Economic Behavior & Organization 51 (4) , pp. 523-536. 10.1016/S0167-2681(02)00215-9

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Abstract

In this paper we model the evolution of conjectures in an economy consisting of a large number of firms which meet in duopolies. The duopoly game is modelled by the conjectural variation (CV) model. An evolutionary process leads to more profitable conjectures becoming more common (payoff-monotonic dynamics). Under this class of selection dynamics, convergence occurs to a small set of serially undominated strategies containing the consistent conjecture. This set can be made arbitrarily small by appropriate choice of the strategy set. If the game is dominance solvable, then the dynamics converge globally to the unique attractor.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HB Economic Theory
Uncontrolled Keywords:	Consistent conjectures; Evolutionary games; Payoff-monotonic dynamics
Publisher:	Elsevier
ISSN:	0167-2681
Last Modified:	21 Oct 2022 09:53
URI:	https://orca.cardiff.ac.uk/id/eprint/38225

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