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Structural Consistency, Consistency, and Sequential Rationality

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  • Kreps, David M
  • Ramey, Garey

Abstract

Sequential equilibria comprise consistent beliefs and a sequentially ra tional strategy profile. Consistent beliefs are limits of Bayes ratio nal beliefs for sequences of strategies that approach the equilibrium strategy. Beliefs are structurally consistent if they are rationaliz ed by some single conjecture concerning opponents' strategies. Consis tent beliefs are not necessarily structurally consistent, notwithstan ding a claim by Kreps and Robert Wilson (1982). Moreover, the spirit of structural consistency conflicts with that of sequential rationali ty. One avoids these difficulties by weakening structural consistency to allow convex combinations of opponents' strategies, but this intr oduces correlation into the strategies that justify out-of-equilibriu m beliefs. Copyright 1987 by The Econometric Society.

Suggested Citation

  • Kreps, David M & Ramey, Garey, 1987. "Structural Consistency, Consistency, and Sequential Rationality," Econometrica, Econometric Society, vol. 55(6), pages 1331-1348, November.
  • Handle: RePEc:ecm:emetrp:v:55:y:1987:i:6:p:1331-48
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    Cited by:

    1. Fudenberg, Drew & Kamada, Yuichiro, 2018. "Rationalizable partition-confirmed equilibrium with heterogeneous beliefs," Games and Economic Behavior, Elsevier, vol. 109(C), pages 364-381.
    2. Okada, Akira, 2016. "A non-cooperative bargaining theory with incomplete information: Verifiable types," Journal of Economic Theory, Elsevier, vol. 163(C), pages 318-341.
    3. Hillas, John & Kvasov, Dmitriy, 2020. "Backward induction in games without perfect recall," Games and Economic Behavior, Elsevier, vol. 124(C), pages 207-218.
    4. Mailath George J. & Samuelson Larry & Swinkels Jeroen M., 1994. "Normal Form Structures in Extensive Form Games," Journal of Economic Theory, Elsevier, vol. 64(2), pages 325-371, December.
    5. Peter A. Streufert, 2003. "Products of Representations Characterize the Products of Dispersions and the Consistency of Beliefs," University of Western Ontario, Departmental Research Report Series 20039, University of Western Ontario, Department of Economics.
    6. Giacomo Bonanno, 2013. "AGM-consistency and perfect Bayesian equilibrium. Part I: definition and properties," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(3), pages 567-592, August.
    7. Feinberg, Yossi, 2005. "Subjective reasoning--solutions," Games and Economic Behavior, Elsevier, vol. 52(1), pages 94-132, July.
    8. Christian W. Bach & Jérémie Cabessa, 2023. "Lexicographic agreeing to disagree and perfect equilibrium," Post-Print hal-04271274, HAL.
    9. Hanjoon Michael Jung, 2020. "Perfect regular equilibrium," International Journal of Economic Theory, The International Society for Economic Theory, vol. 16(4), pages 380-398, December.
    10. , & ,, 2015. "Rationalizable partition-confirmed equilibrium," Theoretical Economics, Econometric Society, vol. 10(3), September.
    11. Massimo A. De Francesco, 2004. "Pricing and matching under duopoly with imperfect buyer mobility," Department of Economics University of Siena 439, Department of Economics, University of Siena.
    12. Giacomo Bonanno, 2009. "A characterization of sequential equilibrium in terms of AGM belief revision," Working Papers 33, University of California, Davis, Department of Economics.
    13. Luo, Xiao & Qiao, Yongchuan & Sun, Yang, 2022. "A revelation principle for correlated equilibrium under trembling-hand perfection," Journal of Economic Theory, Elsevier, vol. 200(C).
    14. Giacomo Bonanno, 2013. "AGM-consistency and perfect Bayesian equilibrium. Part I: definition and properties," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(3), pages 567-592, August.
    15. Battigalli, Pierpaolo, 1997. "On Rationalizability in Extensive Games," Journal of Economic Theory, Elsevier, vol. 74(1), pages 40-61, May.
    16. Ganzach, Yoav, 2018. "Intelligence and the rationality of political preferences," Intelligence, Elsevier, vol. 69(C), pages 59-70.
    17. Streufert, Peter A., 2015. "An elementary proof that additive i-likelihood characterizes the supports of consistent assessments," Journal of Mathematical Economics, Elsevier, vol. 59(C), pages 37-46.
    18. Giacomo Bonanno, 2011. "Perfect Bayesian equilibrium. Part II: epistemic foundations," Working Papers 111, University of California, Davis, Department of Economics.
    19. Igal Milchtaich, 2015. "Polyequilibrium," Working Papers 2015-06, Bar-Ilan University, Department of Economics.
    20. Barry O'Neill, 1992. "Deterrence Theory Discussion: II," Journal of Theoretical Politics, , vol. 4(4), pages 459-477, October.
    21. D. Borie, 2016. "Lexicographic expected utility without completeness," Theory and Decision, Springer, vol. 81(2), pages 167-176, August.
    22. Beggs, A. W., 1992. "The licensing of patents under asymmetric information," International Journal of Industrial Organization, Elsevier, vol. 10(2), pages 171-191, June.
    23. Kohlberg, Elon & Reny, Philip J., 1997. "Independence on Relative Probability Spaces and Consistent Assessments in Game Trees," Journal of Economic Theory, Elsevier, vol. 75(2), pages 280-313, August.
    24. Giacomo Bonanno, 2011. "Perfect Bayesian equilibrium. Part II: epistemic foundations," Working Papers 302, University of California, Davis, Department of Economics.
    25. Giacomo Bonanno, 2009. "A characterization of sequential equilibrium in terms of AGM belief revision," Working Papers 914, University of California, Davis, Department of Economics.

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