Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2017:18: Evolutionary Selection against Iteratively Weakly Dominated Strategies

Axel Bernergård () and Erik Mohlin ()
Additional contact information
Axel Bernergård: Department of Economics, Södertörn University, Postal: Alfred Nobels allé 7, S-141 89 Huddinge, Sweden.
Erik Mohlin: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: This paper provides sufficient conditions under which convex monotonic evolutionary dynamics (a class of imitative dynamics that includes the replicator dynamic) select against strategies that do not survive iterated elimination of weakly dominated strategies. We apply these conditions to Bertrand duopolies, first-price auctions, finitely repeated Prisoner's Dilemmas, and the p-Beauty Contests. Our conditions also imply evolutionary selection against all iteratively strictly dominated strategies.

Keywords: Iterated elimination of weakly dominated strategies; Iterated admissibility; Payoff monotonicity; Convex monotonicity; Evolutionary dynamics; Replicator dynamic

JEL-codes: C72; C73

29 pages, December 9, 2017

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