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Behavioral perfect equilibrium in Bayesian games

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  • Bajoori, Elnaz
  • Flesch, János
  • Vermeulen, Dries

Abstract

We develop the notion of perfect Bayesian Nash Equilibrium—perfect BNE—in general Bayesian games. We test perfect BNE against the criteria laid out by Kohlberg and Mertens (1986). We show that, for a focal class of Bayesian games, perfect BNE exists. Moreover, when payoffs are continuous, perfect BNE is limit undominated for almost every type.

Suggested Citation

  • Bajoori, Elnaz & Flesch, János & Vermeulen, Dries, 2016. "Behavioral perfect equilibrium in Bayesian games," Games and Economic Behavior, Elsevier, vol. 98(C), pages 78-109.
    • Handle: RePEc:eee:gamebe:v:98:y:2016:i:c:p:78-109
    DOI: 10.1016/j.geb.2016.06.002
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    Cited by:

    1. Bajoori, Elnaz & Vermeulen, Dries, 2019. "Equilibrium selection in interdependent value auctions," Mathematical Social Sciences, Elsevier, vol. 98(C), pages 47-56.
    2. Oriol Carbonell-Nicolau, 2021. "Perfect equilibria in games of incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1591-1648, June.
    3. Roger B. Myerson & Philip J. Reny, 2020. "Perfect Conditional ε‐Equilibria of Multi‐Stage Games With Infinite Sets of Signals and Actions," Econometrica, Econometric Society, vol. 88(2), pages 495-531, March.

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    More about this item

    Keywords

    Trembling hand perfect equilibrium; Bayesian game with infinite type spaces; Behavior strategy; Second-price auction with incomplete information;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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