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A characterization of quasi-perfect equilibria

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  • Gatti, Nicola
  • Gilli, Mario
  • Marchesi, Alberto

Abstract

We provide a characterization of quasi-perfect equilibria in n-player games, showing that any quasi-perfect equilibrium can be obtained as limit point of a sequence of Nash equilibria of a certain class of perturbed games in sequence form, and any limit point of a sequence of Nash equilibria of these perturbed games is a quasi-perfect equilibrium. We prove that, in games with three or more players, we need trembles defined as rational functions of the perturbation magnitude ε, whereas, in two-player games with nature, trembles expressed in terms of polynomial functions of ε suffice. Exploiting the relationship between sequence form and extensive form, we also provide a similar characterization in terms of perturbed games in extensive form, though not compliant with Selten's definition of perturbed game.

Suggested Citation

  • Gatti, Nicola & Gilli, Mario & Marchesi, Alberto, 2020. "A characterization of quasi-perfect equilibria," Games and Economic Behavior, Elsevier, vol. 122(C), pages 240-255.
  • Handle: RePEc:eee:gamebe:v:122:y:2020:i:c:p:240-255
    DOI: 10.1016/j.geb.2020.04.012
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    References listed on IDEAS

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    More about this item

    Keywords

    Quasi-perfect equilibrium; Characterization; Trembles; Games in sequence form;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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