| Abstract: |
This paper studies the target projection dynamic, which is a model of myopic
adjustment for population games. We put it into the standard microeconomic
framework of utility maximization with control costs. We also show that it is
well-behaved, since it satisfies the desirable properties: Nash stationarity,
positive correlation, and existence, uniqueness, and continuity of solutions.
We also show that, similarly to other well-behaved dynamics, a general result
for elimination of strictly dominated strategies cannot be established.
Instead we rule out survival of strictly <p> dominated strategies in certain
classes of games. We relate it to the projection dynamic, by showing that the
two dynamics coincide in <p> a subset of the strategy space. We show that
strict equilibria, and evolutionarily stable strategies in $2\times2$ games
are asymptotically stable under the target projection dynamic. Finally, we
show that the stability results that hold under the projection dynamic for
stable games, hold under the target projection dynamic <p> too, for interior
Nash equilibria. |