Minimum-Effort Coordination Games: Stochastic Potential and Logit Equilibrium

  title={Minimum-Effort Coordination Games: Stochastic Potential and Logit Equilibrium},
  author={Simon P. Anderson and Jacob K. Goeree and Charles A. Holt},
  journal={Games Econ. Behav.},
Abstract This paper revisits the minimum-effort coordination game with a continuum of Pareto-ranked Nash equilibria. Noise is introduced via a logit probabilistic choice function. The resulting logit equilibrium distribution of decisions is unique and maximizes a stochastic potential function. In the limit as the noise vanishes, the distribution converges to an outcome that is analogous to the risk-dominant outcome for 2 × 2 games. In accordance with experimental evidence, logit equilibrium… 

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