The theory of learning in games

by Drew Fudenberg

In economics, most noncooperative game theory has focused on equilibrium in games, especially Nash equilibrium and its refinements. In The Theory of Learning in Games Drew Fudenberg and David Levine develop an alternative explanation that equilibrium arises as the long-run outcome of a process in which less than fully rational players grope for optimality over time. The models they explore provide a foundation for equilibrium theory and suggest useful ways for economists to evaluate and modify traditional equilibrium concepts.