The robust selection of rationalizability

Yi-Chun Chen, Satoru Takahashi and Siyang Xiong

Journal of Economic Theory, 2014, vol. 151, issue C, 448-475

Abstract: We propose a notion of selecting rationalizable actions by perturbing players' higher-order beliefs, which we call robust selection. Similarly to WY selection [28], robust selection generalizes the idea behind the equilibrium selection in the email game [27] and the global game [3]. In contrast to WY selection, however, we require selection to be robust to misspecifications of payoffs. Robust selection is a strong notion in the sense that, among types with multiple rationalizable actions, “almost all” selections are fragile; but it is also a weak notion in the sense that any strictly rationalizable action can be robustly selected. We show that robust selection is fully characterized by the curb collection, a notion that generalizes the curb set in [2]. We also use the curb collection to characterize critical types [12] in any fixed finite game.

Keywords: Equilibrium refinement; WY selection; Robust selection; E-mail game; Global game (search for similar items in EconPapers)
JEL-codes: C70 C72 D80 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:151:y:2014:i:c:p:448-475

DOI: 10.1016/j.jet.2014.02.001

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