Abstract
For the class of 2×2 matrix games with two strict Nash equilibria the paper introduces an equilibrium refinement called incentive monotonicity. It selects the risk-dominant equilibrium if interests are conflicting, while it remains silent in games with common interests. These results suggest that the equilibrium-selection problem might be more difficult in games with common interests, which is certainly the case if risk dominance and payoff dominance go in opposite directions.
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Elberfeld, W. Incentive monotonicity and equilibrium selection in 2×2 matrix games. Journal of Economics Zeitschrift für Nationalökonomie 65, 279–290 (1997). https://doi.org/10.1007/BF01226846
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DOI: https://doi.org/10.1007/BF01226846