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Strict robustness to incomplete information

Author

Listed:
  • Stephen Morris

    (Massachusetts Institute of Technology)

  • Daisuke Oyama

    (University of Tokyo)

  • Satoru Takahashi

    (University of Tokyo
    National University of Singapore)

Abstract

We study a strict version of the notion of equilibrium robustness by Kajii and Morris (Econometrica 65:1283–1309, 1997) that allows for a larger class of incomplete information perturbations of a given complete information game, where with high probability, players believe that their payoffs are close to (but may be different from) those of the complete information game. We show that a strict monotone potential maximizer of a complete information game is strictly robust if either the game or the associated strict monotone potential is supermodular, and that the converse also holds in all binary-action supermodular games.

Suggested Citation

  • Stephen Morris & Daisuke Oyama & Satoru Takahashi, 2023. "Strict robustness to incomplete information," The Japanese Economic Review, Springer, vol. 74(3), pages 357-376, July.
    • Handle: RePEc:spr:jecrev:v:74:y:2023:i:3:d:10.1007_s42973-023-00136-3
    DOI: 10.1007/s42973-023-00136-3
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    References listed on IDEAS

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    8. Atsushi Kajii & Stephen Morris, 1997. "The Robustness of Equilibria to Incomplete Information," Econometrica, Econometric Society, vol. 65(6), pages 1283-1310, November.
    9. Basteck, Christian & Daniëls, Tijmen R. & Heinemann, Frank, 2013. "Characterising equilibrium selection in global games with strategic complementarities," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2620-2637.
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