A Statistical Theory of Equilibrium in Games

This paper describes a statistical model of equilibrium behavior in games, which we call Quanta! Response Equilibrium (QRE). The key feature of the equilibrium is that individuals do not always play best responses to the strategies of their opponents, but play better strategies with higher probability than worse strategies. We illustrate several different applications of this approach, and establish a number of theoretical properties of this equilibrium concept. We also demonstrate an equivalence between this equilibrium notion and Bayesian games derived from games of complete information with perturbed payoffs