COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 1643

A ‘Dual’-Improved Shortcut to the Long Run

Kareen Rozen

March 2008

I use the theories of duality and optimal branchings to find a necessary and sufficient characterization of stochastically stable limit sets (SSLS) that helps improve the radius — modified coradius test of Ellison (2000). The improved shortcut I offer may permit the identification of SSLS when Ellison’s radius — modified coradius test fails to identify any, or may be able to pinpoint the true SSLS in cases where Ellison’s test identifies only a superset. I also demonstrate precisely why the radius — modified coradius test is not universally applicable and illuminate the connection between the modified coradius and the Lagrange multipliers of the optimal branching problem.

Keywords: Evolutionary games; Stochastic stability; Optimal branchings; Extended radius; Extended coradius; Modified coradius

JEL Classification: C73