Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Robust Nash Equilibrium and Equilibrium Selection in 2x2 Coordination Games

Contents:

Author Info

  • Raul V. Fabella

    (University of the Philippines School of Economics)

  • Vigile Marie B. Fabella

    (Universit√ęt Konstanz, Germany)

Abstract

We propose an equilibrium concept, the Robust Nash equilibrium (RNE), that combines the best-reply rationality and the "first mover invariance" condition. The single-stage 2x2 symmetric information game G is transformed into sequential two-stage games with two sub-trees: STA has the row player starting and STB has the column player starting. A profile in G is robust if it is the strict SPNE of the two branches; it is ephemeral if it is not the SPNE of any branch. We show that every strict dominant strategy equilibrium of G is robust but not every strict Nash equilibrium of G is. We show further that every robust profile of G is always a strict Nash equilibrium of G. A Robust Nash equilibrium (RNE) of G is any robust profile of G. The RNE of G is unique. We show in particular that the payoff dominant strict Nash equilibrium of a coordination game G is RNE while the strictly payoff-dominated Nash equilibrium of G is ephemeral. The original Harsanyi-Selten preference for payoff dominance over risk dominance is supported by robustness without invoking collective rationality.

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.econ.upd.edu.ph/dp/index.php/dp/article/view/699
Download Restriction: no

Bibliographic Info

Paper provided by University of the Philippines School of Economics in its series UP School of Economics Discussion Papers with number 201216.

as in new window
Length: 14 pages
Date of creation: Oct 2012
Date of revision:
Publication status: Published as UPSE Discussion Paper No. 2012-16, October 2012
Handle: RePEc:phs:dpaper:201216

Contact details of provider:
Postal: Diliman, Quezon City 1101
Phone: 927-9686
Web page: http://www.econ.upd.edu.ph/
More information through EDIRC

Related research

Keywords: Nash Equilibrium;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

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:phs:dpaper:201216. 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: (Reuben T. Campos).

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.