Robust equilibrium outcomes in sequential games under almost common certainty of payoffs

Satoru Takahashi and Olivier Tercieux

Journal of Economic Theory, 2020, vol. 188, issue C

Abstract: We analyze the robustness of equilibria in sequential games when there is almost common certainty of payoffs. We show that a generic extensive-form game may have no robust equilibrium behavior, but has at least one robust equilibrium outcome, which is induced by a proper equilibrium in its normal-form representation. Therefore, backward induction leads to a unique robust outcome in a generic perfect-information game. We also discuss close relation between robustness to incomplete information and strategic stability. Finally, we present the implications of our results for the robustness of subgame-perfect implementation.

Keywords: Incomplete information; Robustness; Higher-order beliefs; Refinements; Subgame-perfect implementation (search for similar items in EconPapers)
JEL-codes: C72 C73 D82 D83 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Robust equilibrium outcomes in sequential games under almost common certainty of payoffs (2020)
Working Paper: Robust equilibrium outcomes in sequential games under almost common certainty of payoffs (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:188:y:2020:i:c:s0022053118302758

DOI: 10.1016/j.jet.2020.105068

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