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.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Anderson, S.K., J.K. Goeree, and C.A. Holt. 2001. Minimum effort coordination games: Stochastic potential and the logit equilibrium. Games and Economic Behavior 34: 177–199.
Capra, C.M., J.K. Goeree, R. Gomez, and C.A. Holt. 1999. Anomalous behavior in a traveler’s dilemma? American Economic Review 89: 678–690.
Cason, T.N., and M. Van Lam. 2005. Uncertainty and resistance to reform in laboratory participation games. European Journal of Political Economy 21: 708–737.
Goeree, J.K., and C.A. Holt. 2001. Ten little treasures of game theory and ten intuitive contradictions. American Economic Review 91: 1402–1422.
Goeree, J.K., and C.A. Holt. 2005a. An experimental study of costly coordination. Games and Economic Behavior 46: 281–294.
Goeree, J.K., and C.A. Holt. 2005b. An explanation of anomalous behavior in models of political participation. American Political Science Review 99: 201–213.
Goeree, J.K., C.A. Holt, and T.R. Palfrey. 2002. Quantal response equilibrium and overbidding in private-value auctions. Journal of Economic Theory 104: 247–272.
Goeree, J.K., C.A. Holt, and T.R. Palfrey. 2003. Risk averse behavior in asymmetric matching pennies games. Games and Economic Behavior 45: 97–113.
Goeree, J.K., C.A. Holt, and T.R. Palfrey. 2005. Regular quantal response equilibrium. Experimental Economics 8: 347–367.
Guarnaschelli, S., R.D. McKelvey, and T.R. Palfrey. 2000. An experimental study of jury decision rules. American Political Science Review 94: 407–423.
Haile, P., A. Hortacsu. and G. Kosenok. 2006. On the empirical content of quantal response equilibrium. Working paper. Yale School of Management, Yale University.
Harsanyi, J. 1973. Games with randomly disturbed payoffs: A new rationale for mixed strategy equilibrium. International Journal of Game Theory 2: 1–23.
Levine, D., and T.R. Palfrey. 2007. The paradox of voter participation: An experimental study. American Political Science Review 101: 143–158.
McFadden, D. 1974. Conditional logit analysis of qualitative choice behavior. In Frontiers in econometrics, ed. P. Zarembka. New York: Academic.
McKelvey, R.D., and T.R. Palfrey. 1995. Quantal response equilibrium for normal form games. Games and Economic Behavior 10: 6–38.
McKelvey, R.D., and T.R. Palfrey. 1996. A statistical theory of equilibrium in games. Japanese Economic Review 47: 186–209.
McKelvey, R.D., and T.R. Palfrey. 1998. Quantal response equilibrium for extensive form games. Experimental Economics 1: 9–41.
McKelvey, R.D., T.R. Palfrey, and R. Weber. 2000. The effects of payoff magnitude and heterogeneity on behavior in 2 × 2 games with a unique mixed-strategy equilibrium. Journal of Economic Behavior and Organization 42: 523–548.
Ochs, J. 1995. Games with unique, mixed strategy equilibria: An experimental study. Games and Economic Behavior 10: 202–217.
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).
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Goeree, J.K., Holt, C.A., Palfrey, T.R. (2018). Quantal Response Equilibria. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2860
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_2860
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences