AGM-consistency and perfect Bayesian equilibrium. Part II: from PBE to sequential equilibrium

Burkhard Schipper
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Burkhard Schipper: Department of Economics, University of California Davis

No 83, Working Papers from University of California, Davis, Department of Economics

Abstract: This is a slightly extended version of a chapter prepared for the Handbook of Logics for Knowledge and Belief edited by Hans van Ditmarsch, Joseph Y. Halpern, Wiebe van der Hoek, and Barteld Kooi, College Publications, London. In [5] (Int. J. Game Theory, 42:567-592, 2013) a general notion of perfect Bayesian equilib- rium (PBE) was introduced for extensive-form games and shown to be intermediate between subgame-perfect equilibrium and sequential equilibrium. The essential ingredient of the pro- posed notion is the existence of a plausibility order on the set of histories that rationalizes a given assessment. In this paper we study restrictions on the belief revision policy encoded in a plausibility order and provide necessary and su¢ cient conditions for a PBE to be a sequential equilibrium.

Keywords: plausibility order; belief revision; Bayesian updating; independence; sequential equi- librium; consistency (search for similar items in EconPapers)
Pages: 63
Date: 2014-01-06
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