Graded Equilibrium
An equilibrium concept in games where payoffs depend on the degree to which strategies are followed, often used in contexts with partial commitment or compliance.
Implications
A concept in game theory that refers to a situation where players achieve a stable outcome, but with varying degrees of stability depending on the strategies employed and the payoffs involved, often used to model complex interactions with multiple potential equilibria.
Example
Example: In a competitive market, firms may reach a graded equilibrium where some firms choose aggressive pricing strategies for short-term gains, while others focus on long-term stability, each finding a different balance based on their risk tolerance and market position.
Related Terms
Different from a pure Nash equilibrium, where players� strategies are fixed and mutually optimal, a graded equilibrium allows for varying levels of stability, reflecting the real-world complexity of strategic interactions.
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