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Quantal Response Equilibria For Normal Form Games (1995)
| Venue: | NORMAL FORM GAMES, GAMES AND ECONOMIC BEHAVIOR |
| Citations: | 647 - 28 self |
BibTeX
@INPROCEEDINGS{McKelvey95quantalresponse,
author = {Richard D. McKelvey and Thomas R. Palfrey},
title = {Quantal Response Equilibria For Normal Form Games},
booktitle = {NORMAL FORM GAMES, GAMES AND ECONOMIC BEHAVIOR},
year = {1995},
pages = {6--38},
publisher = {}
}
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Abstract
We investigate the use of standard statistical models for quantal choice in a game theoretic setting. Players choose strategies based on relative expected utility, and assume other players do so as well. We define a Quantal Response Equilibrium (QRE) as a fixed point of this process, and establish existence. For a logit specification of the error structure, we show that as the error goes to zero, QRE approaches a subset of Nash equilibria and also implies a unique selection from the set of Nash equilibria in generic games. We fit the model to a variety of experimental data sets by using maximum likelihood estimatation.
