Iterated Potential and Robustness of Equilibria

Daisuke Oyama and Olivier Tercieux

MPRA Paper from University Library of Munich, Germany

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 (Kajii and Morris, Econometrica 65 (1997)) and absorbing and globally accessible under perfect foresight dynamics for a small friction (Matsui and Matsuyama, Journal of Economic Theory 65 (1995)). 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)
JEL-codes: C72 C73 D82 (search for similar items in EconPapers)
Date: 2004-12-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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https://mpra.ub.uni-muenchen.de/14320/1/MPRA_paper_14320.pdf revised version (application/pdf)

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 (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:1599

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