Behavioral perfect equilibrium in Bayesian games

• 成果类型: Article
• 署名作者: Bajoori, Elnaz; Flesch, Janos; Vermeulen, Dries
• 署名单位: University of Bath; Maastricht University
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2016.06.002
• 发表日期: 2016
• 页码: 78-109
• 关键词: Trembling hand perfect equilibrium; Bayesian game with infinite type spaces; Behavior strategy; Second-price auction with incomplete information

摘要

We develop the notion of perfect Bayesian Nash Equilibrium-perfect BNE-in general Bayesian games. We test perfect BNE against the criteria laid out by Kohlberg and Mertens (1986). We show that, for a focal class of Bayesian games, perfect BNE exists. Moreover, when payoffs are continuous, perfect BNE is limit undominated for almost every type. We illustrate the use of perfect BNE in the context of a second-price auction with interdependent values. Perfect BNE selects the unique pure strategy equilibrium in continuous strategies that separates types. Moreover, when valuations become independent, the equilibrium converges to the classical truthful dominant strategy equilibrium. We also show that less intuitive equilibria in which types are pooled are ruled out by our selection criterion. We further argue that standard selection criteria for second-price auctions have no bite here. Bidders have no dominant strategies, and the separating equilibrium is not sincere. (C) 2016 Elsevier Inc. All rights reserved.