# Replicator Dynamics - PowerPoint PPT Presentation

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Replicator Dynamics. Nash makes sense ( arguably ) if… - Uber - rational - Calculating. Such as Auctions…. Or Oligopolies…. But why would game theory matter for our puzzles ?. Norms/rights/morality are not chosen ; rather… We believe we have rights!

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Replicator Dynamics

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#### Presentation Transcript

Replicator Dynamics

Nash makes sense (arguably) if…

-Uber-rational

-Calculating

### Or Oligopolies…

But why would game theory matter for our puzzles?

Norms/rights/morality are not chosen;rather…

We believewe have rights!

We feel angry when uses service but doesn’t pay

But…

From where do these feelings/beliefs come?

In this lecture, we will introduce replicator dynamics

The replicator dynamic is a simple model of evolution and prestige-biased learning in games

Today, we will show that replicator leads to Nash

We consider a large population, ,of players

Each period, a player is randomly matched with another player and they play a two-player game

Each player is assigned a strategy. Players cannot choose their strategies

We can think of this in a few ways, e.g.:

• Players are “born with” their mother’s strategy (ignore sexual reproduction)

• Players “imitate” others’ strategies

Note:

Rationality and consciousness don’t enter the picture.

Suppose there are two strategies, and .

Some number, , of players assigned strategy

and some number, , of players assigned strategy

We denote the proportion of the population playing strategy as , so:

The state of the population is given by

where , , and

Since players interact with another randomly chosen player in the population, a player’s EXPECTEDpayoff is determined by the payoff matrix and the proportion of each strategy in the population.

For example, consider

the coordination game:

And the following starting frequencies:

Payoff for player who is playing is

Since depends on and we write

We interpret payoffs as rate of reproduction (fitness).

The average fitness, , of a population is the

weighted average of the two fitness values.

How fast do and grow?

Recall

First, we need to know how fast grows

Let

Each individual reproduces at a rate , and there are of them. So:

Next we need to know how fast grows. By the same logic:

By the quotient rule, and with a little simplification…

This is the replicator equation:

Current frequency of strategy

Own fitness relative

to the average

Growth rate of A

Current frequency of strategy

Because that’s how many As can reproduce

Own fitness relative

to the average

This is our key property.

More successful strategies grow faster

If:

: The proportion of As is non-zero

: The fitness of A is above average

Then:

: A will be increasing in the population

We are interested in states where

since these are places where the proportions of A and B are stationary.

We will call such points steady states.

0

such that

A

B

Recall the payoffs of our (coordination) game:

b, c

a, a

A

B

c, b

d, d

a > c

b < d

i.e., steady states s.t.the dynamics point toward it

What were the pure Nash equilibria of the coordination game?

A

B

b, c

a, a

A

B

c, b

d, d

1

0

And the mixed strategy equilibrium is:

Replicator teaches us:

We end up at Nash

(…if we end)

AND not just any Nash

(e.g. not mixed Nash in coordination)

Let’s generalize this to three strategies:

Now…

is the number playing

is the number playing

is the number playing

Now…

is the proportion playing

is the proportion playing

is the proportion playing

The state of population is

where , , ,

and

For example,

Consider the

Rock-Paper-Scissors

Game:

With starting frequencies:

R

P

S

R

0

-1

1

P

1

0

-1

S

-1

1

0

Fitness for player playing is

In general, fitness for players with strategy R is:

The average fitness, f, of the population is:

Replicator is still:

Current frequency of strategy

Own fitness relative

to the average

Notice not asymptotically stable

It cycles

R

P

S

R

0

-1

2

P

2

0

-1

S

-1

2

0

Note now is asymptotically stable