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Structural Consistency, Consistency, and Sequential Rationality

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  • Kreps, David M
  • Ramey, Garey

Abstract

Sequential equilibria comprise consistent beliefs and a sequentially ra tional strategy profile. Consistent beliefs are limits of Bayes ratio nal beliefs for sequences of strategies that approach the equilibrium strategy. Beliefs are structurally consistent if they are rationaliz ed by some single conjecture concerning opponents' strategies. Consis tent beliefs are not necessarily structurally consistent, notwithstan ding a claim by Kreps and Robert Wilson (1982). Moreover, the spirit of structural consistency conflicts with that of sequential rationali ty. One avoids these difficulties by weakening structural consistency to allow convex combinations of opponents' strategies, but this intr oduces correlation into the strategies that justify out-of-equilibriu m beliefs. Copyright 1987 by The Econometric Society.

Suggested Citation

  • Kreps, David M & Ramey, Garey, 1987. "Structural Consistency, Consistency, and Sequential Rationality," Econometrica, Econometric Society, vol. 55(6), pages 1331-1348, November.
  • Handle: RePEc:ecm:emetrp:v:55:y:1987:i:6:p:1331-48
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    Cited by:

    1. Okada, Akira, 2016. "A non-cooperative bargaining theory with incomplete information: Verifiable types," Journal of Economic Theory, Elsevier, vol. 163(C), pages 318-341.
    2. Mailath George J. & Samuelson Larry & Swinkels Jeroen M., 1994. "Normal Form Structures in Extensive Form Games," Journal of Economic Theory, Elsevier, vol. 64(2), pages 325-371, December.
    3. Peter A. Streufert, 2003. "Products of Representations Characterize the Products of Dispersions and the Consistency of Beliefs," UWO Department of Economics Working Papers 20039, University of Western Ontario, Department of Economics.
    4. Feinberg, Yossi, 2005. "Subjective reasoning--solutions," Games and Economic Behavior, Elsevier, vol. 52(1), pages 94-132, July.
    5. Streufert, Peter A., 2015. "An elementary proof that additive i-likelihood characterizes the supports of consistent assessments," Journal of Mathematical Economics, Elsevier, vol. 59(C), pages 37-46.
    6. hanjoon michael, jung/j, 2010. "Perfect Regular Equilibrium," MPRA Paper 26534, University Library of Munich, Germany.
    7. Giacomo Bonanno, 2013. "AGM-consistency and perfect Bayesian equilibrium. Part I: definition and properties," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(3), pages 567-592, August.
    8. Igal Milchtaich, 2015. "Polyequilibrium," Working Papers 2015-06, Bar-Ilan University, Department of Economics.
    9. Kohlberg, Elon & Reny, Philip J., 1997. "Independence on Relative Probability Spaces and Consistent Assessments in Game Trees," Journal of Economic Theory, Elsevier, vol. 75(2), pages 280-313, August.
    10. Battigalli, Pierpaolo, 1997. "On Rationalizability in Extensive Games," Journal of Economic Theory, Elsevier, vol. 74(1), pages 40-61, May.
    11. Giacomo Bonanno, 2009. "A characterization of sequential equilibrium in terms of AGM belief revision," Working Papers 914, University of California, Davis, Department of Economics.

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