Advanced Search
MyIDEAS: Login to save this article or follow this journal

Belief in the opponentsʼ future rationality

Contents:

Author Info

  • Perea, Andrés
Registered author(s):

    Abstract

    For dynamic games we consider the idea that a player, at every stage of the game, will always believe that his opponents will choose rationally in the future. This is the basis for the concept of common belief in future rationality, which we formalize within an epistemic model. We present an iterative procedure, backward dominance, that proceeds by eliminating strategies from the game, based on strict dominance arguments. We show that the backward dominance procedure selects precisely those strategies that can rationally be chosen under common belief in future rationality if we would not impose (common belief in) Bayesian updating.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/pii/S0899825613001619
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Games and Economic Behavior.

    Volume (Year): 83 (2014)
    Issue (Month): C ()
    Pages: 231-254

    as in new window
    Handle: RePEc:eee:gamebe:v:83:y:2014:i:c:p:231-254

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/inca/622836

    Related research

    Keywords: Epistemic game theory; Dynamic games; Belief in future rationality; Backwards rationalizability procedure; Backward dominance procedure; Backward induction;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Eddie Dekel & Drew Fudenberg & David K Levine, 2001. "Subjective Uncertainty Over Behavior Strategies: A Correction," Levine's Working Paper Archive 7571, David K. Levine.
    2. Bernheim, B Douglas, 1984. "Rationalizable Strategic Behavior," Econometrica, Econometric Society, vol. 52(4), pages 1007-28, July.
    3. Perea, Andres, 2002. "A note on the one-deviation property in extensive form games," Games and Economic Behavior, Elsevier, vol. 40(2), pages 322-338, August.
    4. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-50, July.
    5. Micali, Silvio & Chen, Jing, 2013. "The order independence of iterated dominance in extensive games," Theoretical Economics, Econometric Society, vol. 8(1), January.
    6. Battigalli, Pierpaolo & Siniscalchi, Marciano, 2002. "Strong Belief and Forward Induction Reasoning," Journal of Economic Theory, Elsevier, vol. 106(2), pages 356-391, October.
    7. Battigalli, Pierpaolo, 1997. "On Rationalizability in Extensive Games," Journal of Economic Theory, Elsevier, vol. 74(1), pages 40-61, May.
    8. Hendon, Ebbe & Jacobsen, Hans Jorgen & Sloth, Birgitte, 1996. "The One-Shot-Deviation Principle for Sequential Rationality," Games and Economic Behavior, Elsevier, vol. 12(2), pages 274-282, February.
    9. Asheim,G.B., 1999. "On the epistemic foundation for backward induction," Memorandum 30/1999, Oslo University, Department of Economics.
    10. Eddie Dekel & Drew Fudenberg & David K. Levine, . "Payoff Information and Self-Confirming Equilibrium," ELSE working papers 040, ESRC Centre on Economics Learning and Social Evolution.
    11. David Kreps & Robert Wilson, 1998. "Sequential Equilibria," Levine's Working Paper Archive 237, David K. Levine.
    12. Feinberg, Yossi, 2005. "Subjective reasoning--dynamic games," Games and Economic Behavior, Elsevier, vol. 52(1), pages 54-93, July.
    13. Asheim, Geir B. & Perea, Andres, 2005. "Sequential and quasi-perfect rationalizability in extensive games," Games and Economic Behavior, Elsevier, vol. 53(1), pages 15-42, October.
    14. Werlang, Sérgio Ribeiro da Costa & Chin-Chiu Tan, Tommy, 1987. "The Bayesian Foundations of Solution Concepts of Games," Economics Working Papers (Ensaios Economicos da EPGE) 111, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    15. Rubinstein, Ariel, 1991. "Comments on the Interpretation of Game Theory," Econometrica, Econometric Society, vol. 59(4), pages 909-24, July.
    16. Samet, Dov, 1996. "Hypothetical Knowledge and Games with Perfect Information," Games and Economic Behavior, Elsevier, vol. 17(2), pages 230-251, December.
    17. Shimoji, Makoto & Watson, Joel, 1998. "Conditional Dominance, Rationalizability, and Game Forms," Journal of Economic Theory, Elsevier, vol. 83(2), pages 161-195, December.
    18. Andres Perea, 2010. "Backward Induction versus Forward Induction Reasoning," Games, MDPI, Open Access Journal, vol. 1(3), pages 168-188, July.
    19. Elmes Susan & Reny Philip J., 1994. "On the Strategic Equivalence of Extensive Form Games," Journal of Economic Theory, Elsevier, vol. 62(1), pages 1-23, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:83:y:2014:i:c:p:231-254. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.