Robust refinement of rationalizability with arbitrary payoff uncertainty

• 成果类型: Article
• 署名作者: Chen, Yi-Chun; Takahashi, Satoru; Xiong, Siyang
• 署名单位: National University of Singapore; National University of Singapore; University of Tokyo; University of California System; University of California Riverside
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2022.10.009
• 发表日期: 2022
• 页码: 485-504
• 关键词: refinement; rationalizability; Upper hemicontinuity; Structure theorem; generic uniqueness; universal type space

摘要

Following Fudenberg et al. (1988) and Dekel and Fudenberg (1990), we say that a refinement of (interim correlated) rationalizability is robust if it is prescribed by a solution correspondence that is upper hemicontinuous with respect to perturbations of higher-order beliefs. We characterize robust refinements of rationalizability subject to arbitrary common knowledge restrictions on payoffs. We demonstrate how the characterization pins down a novel family of robust refinements of rationalizability in arbitrary finite games as well as in specific economic examples such as first-price auctions and the Cournot competition. We also apply our characterization to study the critique raised by Weinstein and Yildiz (2007b) to the global-game equilibrium refinement approach. In terms of the model primitives, we provide a necessary and sufficient condition under which the Weinstein-Yildiz critique remains valid.(c) 2022 Elsevier Inc. All rights reserved.