Robust Rationalizability under Almost Common Certainty of Payoffs

Stephen Morris, Satoru Takahashi and Olivier Tercieux

No 1326, Working Papers from Princeton University, Department of Economics, Econometric Research Program.

Abstract: An action is robustly rationalizable if it is rationalizable for every type who has almost common certainty of payoffs. We illustrate by means of an example that an action may not be robustly rationalizable even if it is weakly dominant, and argue that robust rationalizability is a very stringent refinement of rationalizability. Nonetheless, we show that every strictly rationalizable action is robustly rationalizable. We also investigate how permissive robust rationalizability becomes if we require that players be fully certain of their own payoffs.

Keywords: equilibrium selection; supermodular game; incomplete information; robustness; contagion; global game (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2011-06
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Related works:
Journal Article: ROBUST RATIONALIZABILITY UNDER ALMOST COMMON CERTAINTY OF PAYOFFS (2012)
Working Paper: Robust Rationalizability Under Almost Common Certainty of Payoff (2012)
Working Paper: Robust Rationalizability Under Almost Common Certainty of Payoff (2012)
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