Rule evolution and equilibrium selection (Q700128)

The paper studies rule evolution and its effect on selection between strict equilibria. If the agents cannot change rules, equilibrium selection is determined by the relative frequency of agents making investigations with two rules: the myopic best response and naive imitation. When the agents can only change rules through mutation, the efficient equilibrium weakly dominates the risk-dominant one. If the agents can change rules by updating, then the efficient equilibrium strictly dominates the risk-dominant one.