Perfect Sequential Reciprocity and Dynamic Consistency
AbstractDufwenberg and Kirchsteiger�s (2004) extends Rabin�s (1993) theory of reciprocity in a dynamic sense, introducing a rule of revision for player�s beliefs. The Sequential Reciprocity Equilibrium [SRE] they define can be dynamically inconsistent. In this article it is argued that such dynamic inconsistency is not intrinsically related to issues of reciprocity, but rather to the particular way the beliefs�updating process is modeled. A refinement of the SRE, which is both dynamically consistent and, it is argued, more sound to assumptions usually made in the literature of information economics and philosophy, is proposed.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 10261.
Date of creation: Jun 2004
Date of revision: Sep 2007
Reciprocity; � Dynamic Consistency;
Find related papers by JEL classification:
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-05 (All new papers)
- NEP-EVO-2008-09-05 (Evolutionary Economics)
- NEP-GTH-2008-09-05 (Game Theory)
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