Proper rationalizability and backward induction
AbstractThis paper introduces a new normal form rationalizability concept, which in reduced normal form games corresponding to generic finite extensive games of perfect information yields the unique backward induction outcome. The basic assumption is that every player trembles "more or less rationally" as in the definition of a -proper equilibrium by Myerson (1978). In the same way that proper equilibrium refines Nash and perfect equilibrium, our model strengthens the normal form rationalizability concepts by Bernheim (1984), BÃrgers (1994) and Pearce (1984). Common knowledge of trembling implies the iterated elimination of strategies that are strictly dominated at an information set. The elimination process starts at the end of the game tree and goes backwards to the beginning.
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Bibliographic InfoArticle provided by Springer in its journal International Journal of Game Theory.
Volume (Year): 28 (1999)
Issue (Month): 4 ()
Note: Received: October 1996/Final version: May 1999
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- 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.
- Perea,Andrés, 2003. "Rationalizability and Minimal Complexity in Dynamic Games," Research Memoranda 047, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
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Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS)
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- Perea, Andrés, 2011. "An algorithm for proper rationalizability," Games and Economic Behavior, Elsevier, vol. 72(2), pages 510-525, June.
- Oikonomou, V.K. & Jost, J, 2013. "Periodic strategies and rationalizability in perfect information 2-Player strategic form games," MPRA Paper 48117, University Library of Munich, Germany.
- Antonio Quesada, 2002. "Belief system foundations of backward induction," Theory and Decision, Springer, vol. 53(4), pages 393-403, December.
- Perea,Andrés, 2003. "Proper Rationalizability and Belief Revision in Dynamic Games," Research Memoranda 048, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
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