Tenable threats when Nash equilibrium is the norm

Autor: Jozsef Sakovics, Françoise Forges
Přispěvatelé: CEntre de REcherches en MAthématiques de la DEcision (CEREMADE), Université Paris Dauphine-PSL, Université Paris sciences et lettres (PSL)-Université Paris sciences et lettres (PSL)-Centre National de la Recherche Scientifique (CNRS), Laboratoire d'Economie de Dauphine (LEDa), Institut de Recherche pour le Développement (IRD)-Université Paris Dauphine-PSL
Rok vydání: 2022
Předmět:
game theory
Statistics and Probability
JEL: C - Mathematical and Quantitative Methods/C.C7 - Game Theory and Bargaining Theory/C.C7.C73 - Stochastic and Dynamic Games • Evolutionary Games • Repeated Games
Economics and Econometrics
JEL: D - Microeconomics/D.D0 - General/D.D0.D01 - Microeconomic Behavior: Underlying Principles
[QFIN]Quantitative Finance [q-fin]
C.C7.C72
JEL: D - Microeconomics/D.D8 - Information
Knowledge
and Uncertainty/D.D8.D83 - Search • Learning • Information and Knowledge • Communication • Belief • Unawareness
JEL: D - Microeconomics/D.D9 - Intertemporal Choice/D.D9.D91 - Intertemporal Household Choice • Life Cycle Models and Saving
microeconomics
Nash Equilibrium
Mathematics (miscellaneous)
backward induction
JEL: C - Mathematical and Quantitative Methods/C.C7 - Game Theory and Bargaining Theory/C.C7.C72 - Noncooperative Games
games of perfect information
sequential rationality
threat
Statistics
Probability and Uncertainty
credible threat
equilibrium refinement
Social Sciences (miscellaneous)
Zdroj: Forges, F & Sakovics, J 2022, ' Tenable threats when Nash Equilibrium is the norm ', International Journal of Game Theory, vol. 51, no. 3-4, pp. 589-605 . https://doi.org/10.1007/s00182-022-00806-3
ISSN: 1432-1270
0020-7276
Popis: We formally assume that players in a game consider Nash Equilibrium (NE) the behavioral norm. In finite games of perfect information this leads to a refinement of NE: Faithful Nash Equilibrium (FNE). FNE is outcome equivalent to NE of the trimmed game, obtained by restricting the original tree to its NE paths. Thus, it always exists but it need not be unique. Iterating the norm ensures uniqueness of outcome. FNE may violate backward induction when subgame perfection requires play according to the SPE following a deviation from it. We thus provide an alternative view of tenable threats in equilibrium analysis.
Databáze: OpenAIRE
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