The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Quantal Response Equilibria

  • Jacob K. Goeree
  • Charles A. Holt
  • Thomas R. Palfrey
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2860

Abstract

A quantal response specifies choice probabilities that are smooth, increasing functions of expected payoffs. A quantal response equilibrium has the property that the choice distributions match the belief distributions used to calculate expected payoffs. This stochastic generalization of the Nash equilibrium provides strong empirical restrictions that are generally consistent with data from laboratory experiments with human subjects. We define the concept of regular quantal response equilibrium and discuss several applications from the recent literature.

Keywords

Coordination Extensive form games Fixed-point theorems Incomplete information Interchangeability Learning Nash equilibrium Probabilistic choice models Quantal response equilibrium Sequential equilibria Traveller’s Dilemma 

JEL Classification

C9 
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Notes

Acknowledgment

We acknowledge financial support from the Alfred P. Sloan Foundation, the National Science Foundation (SBR 0094800 and 0551014; SES 0450712 and 0214013), and the Dutch National Science Foundation (VICI 453.03.606).

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Jacob K. Goeree
    • 1
  • Charles A. Holt
    • 1
  • Thomas R. Palfrey
    • 1
  1. 1.