Rationalizable self-confirming equilibrium in static games with unawareness

Norimasa Kobayashi () and Yasuo Sasaki ()
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Norimasa Kobayashi: Tokyo Institute of Technology
Yasuo Sasaki: Gakushuin University

International Journal of Game Theory, 2024, vol. 53, issue 3, No 2, 765-790

Abstract: Abstract This paper discusses rationalizable self-confirming equilibrium (RSCE) in static games with unawareness that captures steady states of such games. We begin by defining the equilibrium concept in terms of its epistemic conditions. k-RSCE is a situation in which agents make rational choices and have correct beliefs about one another’s choices, and moreover these can be mutual belief to the k-th order. We then present an alternative definition that dispenses with these epistemic conditions and allows us to obtain equilibria through iterative eliminations of certain action profiles. In standard static games, k-RSCE reduces to Nash equilibrium, but not under unawareness. We examine the equilibrium concept’s properties and clarify its relationships with other equilibrium concepts for games with unawareness.

Keywords: Static games; Unawareness; Rationalizable self-confirming equilibrium; Steady state; Belief system (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s00182-024-00907-1

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