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Unilateral Deviation with Perfect Information

Author

Listed:
  • Pradeep Dubey

    (SUNY at Stony Brook)

  • Ori Haimanko

    (CORE, Louvain-la Neuve, Belgium)

Abstract

For extensive form games with perfect information, consider a learning process in which, at any iteration, each player unilaterally deviates to a best response to his current conjectures of others' strategies; and then updates his conjectures in accordance with the induced play of the game. We show that, for generic payoffs, the outcome of the game becomes stationary in finite time, and is consistent with Nash equilibrium. In general, if payoffs have ties or if players observe more of each others' strategies than is revealed by plays of the game, the same result holds provided a rationality constraint is imposed on unilateral deviations: no player changes his moves in subgames that he deems unreachable, unless he stands to improve his payoff there. Moreover, with this constraint, the sequence of strategies and conjectures also becomes stationary, and yields a self- confirming equilibrium.

Suggested Citation

  • Pradeep Dubey & Ori Haimanko, 2000. "Unilateral Deviation with Perfect Information," Cowles Foundation Discussion Papers 1280, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:1280
    as

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    File URL: https://cowles.yale.edu/sites/default/files/files/pub/d12/d1280.pdf
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    References listed on IDEAS

    as
    1. Fudenberg, Drew & Levine, David K, 1993. "Self-Confirming Equilibrium," Econometrica, Econometric Society, vol. 61(3), pages 523-545, May.
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    More about this item

    Keywords

    Extensive form games with perfect information; self-confirming and Nash equilibria; unilateral deviations; objective updates; convergence in finitely many steps;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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