Strategic uncertainty and equilibrium selection in discontinuous games

• 成果类型: Article
• 署名作者: Bich, Philippe
• 署名单位: Paris School of Economics
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2019.08.001
• 发表日期: 2019
• 页码: 786-822
• 关键词: Prudent equilibrium; Nash equilibrium; refinement; strategic uncertainty; Better-reply secure; discontinuous games

摘要

We introduce the new concept of prudent equilibrium to model strategic uncertainty, and prove it exists in large classes of discontinuous games. When the game is better-reply secure, we show that prudent equilibrium refines Nash equilibrium. In contrast with the current literature, we don't use probabilities to model players' strategies and beliefs about other players' strategies. We provide examples (first-price auctions, location game, Nash demand game, etc.) where prudent equilibrium concept removes most non-intuitive solutions of the game. (C) 2019 Elsevier Inc. All rights reserved.