Pairwise Imitation and Tournament Graphs

ABSTRACT This paper investigates strategic dynamics under the behavioral rule of pairwise interact and imitate (PII), which requires minimal information and emphasizes outperforming opponents in pairwise interactions. We characterize PII using weak tournament graphs and, for a broad class of dynamics, establish a one‐shot stability result for stochastic stability. Applications include Cournot competition, strategic complements and substitutes, externalities, Nash demand games, and status‐seeking contests. The analysis highlights the competing roles of spite effects and perturbations in favoring relative success versus efficiency.