Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150078
Authors: 
Wilson, Robert B.
Govindan, Srihari
Year of Publication: 
2006
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 1 [Year:] 2006 [Issue:] 2 [Pages:] 167-206
Abstract: 
A refinement of the set of Nash equilibria that satisfies two assumptions is shown to select a subset that is stable in the sense defined by Kohlberg and Mertens. One assumption requires that a selected set is invariant to adjoining redundant strategies and the other is a strong version of backward induction. Backward induction is interpreted as the requirement that each player's strategy is sequentially rational and conditionally admissible at every information set in an extensive-form game with perfect recall, implemented here by requiring that the equilibrium is quasi-perfect. The strong version requires 'truly' quasi-perfection in that each strategy perturbation refines the selection to a quasi-perfect equilibrium in the set. An exact characterization of stable sets is provided for two-player games.
Subjects: 
Game theory
equilibrium selection
stability
JEL: 
C72
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/2.5
Document Type: 
Article

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