Efficiency and Stability of Sampling Equilibrium in Public Good Games

Submitted by Manuela Fonseca on

Most models of social preferences and bounded rationality that are effective in explaining efficiency-increasing departures from equilibrium behavior cannot easily account for similar deviations when they are efficiency-reducing. We show that the notion of sampling equilibrium, subject to a suitable stability refinement, can account for behavior in both efficiency-enhancing and efficiency-reducing conditions.

Policy Design