Splitting The Baby In Two: How To Solve Solomon'S Dilemma When Agents Are Boundedly Rational
Ponti, Giovanni (2000) Splitting The Baby In Two: How To Solve Solomon'S Dilemma When Agents Are Boundedly Rational. [Working Paper]. p. 17. Working Papers. Serie AD (2000-08).
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We study the dynamic implementation of the first-best for King Solomon's Dilemma, on the assumption that boundedly rational players find their way to equilibrium using monotonic evolutionary dynamics, and also with best-reply dynamics. We find that, although the mechanisms proposed by the literature are dynamically implementable with best-reply dynamics, the same does not hold when monotonic dynamics are considered. To solve this problem, we propose an alternative mechanism, whose game-form is still implementable in the traditional sense. However, it is also dynamically implementable, as every interior path of the adjustment pro-cesses we consider converges to the first-best, which is also asymptotically stable.
|Item Type:||Report / Paper (Working Paper)|
|Research documents and activity classification:||Working Papers > Refereed Working Papers / of international relevance|
|Divisions:||Department of Business and Management|
|Additional Information:||The definitive version of the paper has been published as "Splitting the baby in two: solving Solomon's dilemma with boundedly rational agents" in Journal of Evolutionary Economics, Vol. 10(4), Pages 449-455, 2000.|
|Uncontrolled Keywords:||Solomon’s Dilemma, Implementation Theory, Evolutionary Dynamics.|
|MIUR Scientific Area:||Area 13 - Economics and Statistics > SECS-P/01 Political Economy|
|Deposited By:||Maria Teresa Nistico|
|Deposited On:||16 Dec 2010 15:14|
|Last Modified:||23 Apr 2013 15:03|
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