Belief in the opponents' future rationality

• 成果类型: Article
• 署名作者: Perea, Andres
• 署名单位: Maastricht University; Maastricht University
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2013.11.008
• 发表日期: 2014
• 页码: 231-254
• 关键词: Epistemic game theory; dynamic games; Belief in future rationality; Backwards rationalizability procedure; Backward dominance procedure; backward induction

摘要

For dynamic games we consider the idea that a player, at every stage of the game, will always believe that his opponents will choose rationally in the future. This is the basis for the concept of common belief in future rationality, which we formalize within an epistemic model. We present an iterative procedure, backward dominance, that proceeds by eliminating strategies from the game, based on strict dominance arguments. We show that the backward dominance procedure selects precisely those strategies that can rationally be chosen under common belief in future rationality if we would not impose (common belief in) Bayesian updating. (C) 2013 Elsevier Inc. All rights reserved.