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Sequentially Stable Outcomes

Author

Listed:
  • Francesc Dilmé

    (University of Bonn)

Abstract

This paper introduces and analyzes sequentially stable outcomes in extensive-form games. An outcome ω is sequentially stable if, for any " >0 and any small enough perturbation of the players’ behavior, there is an "-perturbation of the players’ payoffs and a corresponding equilibrium with outcome close to ω. Sequentially stable outcomes exist for all finite games and are outcomes of sequential equilibria. They are closely related to stable sets of equilibria and satisfy versions of forward induction, iterated strict equilibrium dominance, and invariance to simultaneous moves. In signaling games, sequentially stable outcomes pass the standard selection criteria, and when payoffs are generic, they coincide with outcomes of stable sets of equilibria.

Suggested Citation

  • Francesc Dilmé, 2023. "Sequentially Stable Outcomes," ECONtribute Discussion Papers Series 254, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:254
    as

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    File URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_X254_2023.pdf
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    References listed on IDEAS

    as
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    5. Srihari Govindan, 1996. "A Subgame Property of Stable Equilibria," Mathematics of Operations Research, INFORMS, vol. 21(4), pages 991-999, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Sequential stability; stable outcome; signaling games;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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