Iterated potential and robustness of equilibria

Daisuke Oyama and Olivier Tercieux ()
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Olivier Tercieux: PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: For any given set-valued solution concept, it is possible to consider iterative elimination of actions outside the solution set. This paper applies such a procedure to define the concept of iterated monotone potential maximizer (iterated MP-maximizer). It is shown that under some monotonicity conditions, an iterated MP-maximizer is robust to incomplete information [A. Kajii, S. Morris, The robustness of equilibria to incomplete information, Econometrica 65 (1997) 1283-1309] and absorbing and globally accessible under perfect foresight dynamics for a small friction [A. Matsui, K. Matsuyama, An approach to equilibrium selection, J. Econ. Theory 65 (1995) 415-434]. Several simple sufficient conditions under which a game has an iterated MP-maximizer are also provided.

Keywords: Equilibrium selection; Robustness; Incomplete information; Perfect foresight dynamics; Iteration; Monotone potential; p-Dominance (search for similar items in EconPapers)
Date: 2009-07
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Citations: View citations in EconPapers (34)

Published in Journal of Economic Theory, 2009, 144 (4), pp.1726-1769. ⟨10.1016/j.jet.2009.03.001⟩

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Related works:
Journal Article: Iterated potential and robustness of equilibria (2009)
Working Paper: Iterated potential and robustness of equilibria (2009)
Working Paper: Iterated Potential and Robustness of Equilibria (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-00754349

DOI: 10.1016/j.jet.2009.03.001

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