Bagwell's paradox, forward induction and outside option games
AbstractIn Stackelberg-like games there is an advantage of moving first. However, Bagwell (1995) shows that this result may not hold if the second player can make only imperfect observations. We explore whether this paradox also holds when the advantage comes from forward induction arguments in the class of outside option games.
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Bibliographic InfoPaper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we1035.
Date of creation: Dec 2010
Date of revision:
Bagwell's paradox; Commitment; Observability; Noise; Outside option games; Forward induction;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-23 (All new papers)
- NEP-GTH-2010-12-23 (Game Theory)
- NEP-HPE-2010-12-23 (History & Philosophy of Economics)
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.:
- van Damme, Eric, 1989.
"Stable equilibria and forward induction,"
Journal of Economic Theory,
Elsevier, vol. 48(2), pages 476-496, August.
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