Perfect Regular Equilibrium
AbstractWe propose a revised version of the perfect Bayesian equilibrium in general multi-period games with observed actions. In finite games, perfect Bayesian equilibria are weakly consistent and subgame perfect Nash equilibria. In general games that allow a continuum of types and strategies, however, perfect Bayesian equilibria might not satisfy these criteria of rational solution concepts. To solve this problem, we revise the definition of the perfect Bayesian equilibrium by replacing Bayes' rule with a regular conditional probability. We call this revised solution concept a perfect regular equilibrium. Perfect regular equilibria are always weakly consistent and subgame perfect Nash equilibria in general games. In addition, perfect regular equilibria are equivalent to simplified perfect Bayesian equilibria in finite games. Therefore, the perfect regular equilibrium is an extended and simple version of the perfect Bayesian equilibrium in general multi-period games with observed actions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 26534.
Date of creation: 09 Oct 2010
Date of revision:
Bayes' rule; general Multi-period game; Perfect Bayesian equilibrium; Perfect regular equilibrium; Regular conditional probability; Solution concept.;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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