Robust equilibrium outcomes in sequential games under almost common certainty of payoffs

Satoru Takahashi and Olivier Tercieux ()
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Olivier Tercieux: PJSE - Paris Jourdan Sciences Economiques - 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, 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: We analyze the robustness of equilibria in sequential games when there is almost common certainty of payoffs. We show that a generic extensive-form game may have no robust equilibrium behavior, but has at least one robust equilibrium outcome, which is induced by a proper equilibrium in its normal-form representation. Therefore, backward induction leads to a unique robust outcome in a generic perfect-information game. We also discuss close relation between robustness to incomplete information and strategic stability. Finally, we present the implications of our results for the robustness of subgame-perfect implementation.

Keywords: Incomplete information; Robustness; Higher-order beliefs; Refinements; Subgame-perfect implementation (search for similar items in EconPapers)
Date: 2020-07
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02875199v1
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Citations: View citations in EconPapers (1)

Published in Journal of Economic Theory, 2020, 188, ⟨10.1016/j.jet.2020.105068⟩

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Journal Article: Robust equilibrium outcomes in sequential games under almost common certainty of payoffs (2020)
Working Paper: Robust equilibrium outcomes in sequential games under almost common certainty of payoffs (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-02875199

DOI: 10.1016/j.jet.2020.105068

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