EQUILIBRIUM SELECTION IN STOCHASTIC GAMES

P. Jean-Jacques Herings and Ronald Peeters

International Game Theory Review (IGTR), 2003, vol. 05, issue 04, 307-326

Abstract: In this paper a selection theory for stochastic games is developed. The theory itself is based on the ideas of Harsanyi and Selten to select equilibria for games in standard form. We introduce several possible definitions for the stochastic tracing procedure, an extension of the linear tracing procedure to the class of stochastic games. We analyze the properties of these alternative definitions. We show that exactly one of the proposed extensions is consistent with the formulation of Harsanyi–Selten for games in standard form and captures stationarity.

Keywords: Game theory; Stochastic games; equilibrium selection; linear tracing procedure; correlated beliefs; JEL classification code: C72; C73 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Equilibrium selection in stochastic games (2001)
Working Paper: Equilibrium Selection in Stochastic Games (2001)
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DOI: 10.1142/S0219198903001082

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