Generalized Nash equilibrium without common belief in rationality

Christian W. Bach and Andrés Perea

Economics Letters, 2020, vol. 186, issue C

Abstract: We provide an existence result for the solution concept of generalized Nash equilibrium, which can be viewed as the direct incomplete information analogue of Nash equilibrium. Intuitively, a tuple consisting of a probability measure for every player on his choices and utility functions is a generalized Nash equilibrium, whenever some mutual optimality property is satisfied. This incomplete information solution concept is then epistemically characterized in a way that common belief in rationality is neither used nor implied. For the special case of complete information, an epistemic characterization of Nash equilibrium ensues as a corollary.

Keywords: Common belief in rationality; Complete information; Epistemic characterization; Epistemic game theory; Existence; Generalized Nash equilibrium; Incomplete information; Interactive epistemology; Nash equilibrium; Solution concepts; Static games (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:186:y:2020:i:c:s0165176519302502

DOI: 10.1016/j.econlet.2019.108526

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