Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129536
Authors: 
Abramsky, Samson
Winschel, Viktor
Year of Publication: 
2012
Series/Report no.: 
Working Paper Series, Department of Economics, University of Mannheim 12-17
Abstract: 
We present a novel coalgebraic formulation of infinite extensive games. We define both the game trees and the strategy profiles by possibly infinite systems of corecursive equations. Certain strategy profiles are proved to be subgame perfect equilibria using a novel proof principle of predicate coinduction which is shown to be sound by reducing it to Kozen's metric coinduction. We characterize all subgame perfect equilibria for the dollar auction game. The economically interesting feature is that in order to prove these results we do not need to rely on continuity assumptions on the payoffs which amount to discounting the future. In particular, we prove a form of one-deviation principle without any such assumptions. This suggests that coalgebra supports a more adequate treatment of infinite-horizon models in game theory and economics.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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