Abstract
This paper studies rule evolution and its effect on selection between strict equilibria. Two rules are investigated; the myopic best response and naive imitation. If agents cannot change rules, equilibrium selection is determined by the relative frequency of agents using the two rules. When agents can only change rules through mutation, the efficient equilibrium weakly dominates the risk-dominant one. If agents can change rules by updating, then the efficient equilibrium strictly dominates the risk-dominant one. Journal of Economic Literature Classification Numbers: C72, C73, D81.
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