Iterated potential and robustness of equilibria

Daisuke Oyama and Olivier Tercieux

Journal of Economic Theory, 2009, vol. 144, issue 4, 1726-1769

Abstract: For any given set-valued solution concept, it is possible to consider iterative elimination of actions outside the solution set. This paper applies such a procedure to define the concept of iterated monotone potential maximizer (iterated MP-maximizer). It is shown that under some monotonicity conditions, an iterated MP-maximizer is robust to incomplete information [A. Kajii, S. Morris, The robustness of equilibria to incomplete information, Econometrica 65 (1997) 1283-1309] and absorbing and globally accessible under perfect foresight dynamics for a small friction [A. Matsui, K. Matsuyama, An approach to equilibrium selection, J. Econ. Theory 65 (1995) 415-434]. Several simple sufficient conditions under which a game has an iterated MP-maximizer are also provided.

Keywords: Equilibrium; selection; Robustness; Incomplete; information; Perfect; foresight; dynamics; Iteration; Monotone; potential; p-Dominance (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (37)

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Related works:
Working Paper: Iterated potential and robustness of equilibria (2009)
Working Paper: Iterated potential and robustness of equilibria (2009)
Working Paper: Iterated Potential and Robustness of Equilibria (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:144:y:2009:i:4:p:1726-1769

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