Best-reply matching and the centipede game
AbstractIn their paper on Best-Reply Matching (BRM), Droste, Kosfeld & Voorneveld (2003) obtained quite intuitive results for the centipede game. In this short paper we first show that these results derive from the application of their criterion to the reduced normal form of the game. Then we prove that applying their criterion to the normal form of the game leads to different results. Third we propose an extension of Droste, Kosfeld & Voorneveld’s criterion, which leads to the same results in both the reduced normal form and the normal form of a game. This extension leads to a larger set of behaviors, including the Subgame Perfect Nash equilibrium but also a limited rationality behavior that strongly sustains the continuation of the game.
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Bibliographic InfoPaper provided by Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg in its series Working Papers of BETA with number 2007-25.
Date of creation: 2007
Date of revision:
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Best-Reply Matching; centipede game; reduced normal form; normal form; Subgame Perfect Nash equilibrium.;
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-2007-07-07 (All new papers)
- NEP-GTH-2007-07-07 (Game Theory)
- NEP-IND-2007-07-07 (Industrial Organization)
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.:
- D. B. Bernheim, 2010.
"Rationalizable Strategic Behavior,"
Levine's Working Paper Archive
661465000000000381, David K. Levine.
- Droste, E.J.R. & Kosfeld, M. & Voorneveld, M., 1998.
"A Myopic Adjustment Process Leading to Best-Reply Matching,"
1998-111, Tilburg University, Center for Economic Research.
- Kosfeld, Michael & Droste, Edward & Voorneveld, Mark, 2002. "A myopic adjustment process leading to best-reply matching," Games and Economic Behavior, Elsevier, vol. 40(2), pages 270-298, August.
- Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-50, July.
- Droste, Edward & Kosfeld, Michael & Voorneveld, Mark, 2003. "Best-reply matching in games," Mathematical Social Sciences, Elsevier, vol. 46(3), pages 291-309, December.
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