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Outcome destabilization

Author

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  • Dilmé, Francesc

Abstract

In a game in extensive form, we say that a sequence of trembles destabilizes an outcome if there is no corresponding sequence of payoff perturbations and Nash outcomes converging to the outcome. We use equilibrium destabilization to characterize sequential equilibria and sequentially stable outcomes, and to reinterpret standard selection criteria in signaling games as a means of ruling out implausible equilibria by identifying destabilizing tremble sequences. We show that the existence of a maximally destabilizing sequence of trembles (destabilizing all outcomes but one) significantly simplifies studying strategically stable behavior in complex games such as finitely repeated games.

Suggested Citation

  • Dilmé, Francesc, 2026. "Outcome destabilization," Games and Economic Behavior, Elsevier, vol. 157(C), pages 34-49.
    • Handle: RePEc:eee:gamebe:v:157:y:2026:i:c:p:34-49
    DOI: 10.1016/j.geb.2026.01.004
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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