Dynamics and Equilibrium

Sergiu Hart, Hebrew University of Jerusalem


An overview of recent work on dynamical systems in multi-player environments. On the one hand, the natural informational restriction that each participant does not know the payoff functions of the other participants -- "uncoupledness" -- severely limits the possibilities to converge to Nash equilibria. On the other hand, there are simple adaptive heuristics -- such as "regret matching" -- that lead in the long run to correlated equilibria, a concept that embodies full rationality. Connections to behavioral economics, neurobiological studies, and engineering, are also mentioned.