Robust multiplicity with a grain of naiveté

Aviad Heifetz () and Willemien Kets
Additional contact information
Aviad Heifetz: Department of Economics, Open University of Israel

Theoretical Economics, 2018, vol. 13, issue 1

Abstract: Rationalizability is a central concept in game theory. Since there may be many rationalizable strategies, applications commonly use refinements to obtain sharp predictions. In an important paper, Weinstein and Yildiz [2007] show that no refinement is robust to perturbations of high-order beliefs. We show that robust refinements do exist if we relax the assumption that all players are unlimited in their reasoning ability. In particular, for a class of models, every strict Bayesian-Nash equilibrium is robust. In these environments, a researcher interested in making sharp predictions can use refinements to select among the strict equilibria of the game, and these predictions will be robust.

Keywords: Robustness; games with incomplete information; rationalizability; finite depth of reasoning; higher-order beliefs; level-k models; global games; refinements (search for similar items in EconPapers)
JEL-codes: C72 D8 (search for similar items in EconPapers)
Date: 2018-01-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://econtheory.org/ojs/index.php/te/article/viewFile/20180415/19827/590 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:the:publsh:2098

Access Statistics for this article

Theoretical Economics is currently edited by Simon Board, Todd D. Sarver, Juuso Toikka, Rakesh Vohra, Pierre-Olivier Weill

More articles in Theoretical Economics from Econometric Society
Bibliographic data for series maintained by Martin J. Osborne ().