This paper develops an approach to equilibrium selection in game theory based on studying the learning process through which equilibrium is achieved. The differential equations derived from models of interactive learning typically have stationary states that are not isolated. Instead, Nash...

We show that a strategy profile of a normal form game is proper if and only if it is quasi-perfect in every extensive form (with that normal form). Thus, properness requires optimality along a sequence of supporting trembles, while sequentiality only requires optimality in the limit.

The present paper illustrates the coordination problem with a standard two-person non-cooperative gae, with yields two Nash equilibria in pure strategies, one of which is Pareto dominated by the other.

In repeated games with imperfect public monitoring, players can use public signals to perfectly coordinate their behavior. Our study of repeated games with imperfect private monitoring focusses on the coordination problem that arises without public signals.

The authors develop a two-stage negotiation model to study the impact of costly inspections on both the coalition formation outcome and the per-member payoffs.

Under not-too-stringent assumptions this study shows that there exists a generic extensive-form game having no "strategically stable" equilibrium. In addition, it is suggested that careless invocation of "common belief assumption" may be a potential source of inconsistent beliefs for players.

Tax compliance is modelled as a Bayesian Nash equilibrium in a costly state verification game with imperfect auditing. Neither the tax payer nor the auditor can measure the tax payer's true liability precisely: they observe independent noisy signals.

We propose a model of a random normal game for given (finite nonempty) sets of players and pure strategies; this model is shown to be canonical in a certain sense.

We study equilibrium selection by evolutionary learning in monotone signalling games. The learning process is a development of that introduced by Young for static games extended to deal with incomplete information and sequential moves; it thus involves stochastic trembles. For vanishing trembles...