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T-Space at The University of Toronto Libraries >
Theoretical Economics >
Volume 1, Number 2 (June 2006) >

Please use this identifier to cite or link to this item: http://hdl.handle.net/1807/9417

Title: Sufficient conditions for stable equilibria
Authors: Srihari Govindan; University of Iowa
Robert B. Wilson; Stanford University
Keywords: 
Game theory, equilibrium selection, stability
C72
Issue Date: 1-Jun-2006
Publisher: Theoretical Economics
Citation: Theoretical Economics; Vol 1, No 2 (2006); 167-206
Abstract: [This item is a preserved copy. To view the original, visit http://econtheory.org/] 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.
URI: http://hdl.handle.net/1807/9417
Other Identifiers: http://econtheory.org/ojs/index.php/te/article/view/20060167
Rights: Authors who publish in <i>Theoretical Economics</i> will release their articles under the <a href="http://creativecommons.org/licenses/by-nc/2.5/">Creative Commons Attribution-NonCommercial license</a>. This license allows anyone to copy and distribute the article for non-commercial purposes provided that appropriate attribution is given.
Appears in Collections:Volume 1, Number 2 (June 2006)

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