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The equivalence of the Dekel-Fudenberg iterative procedure and weakly perfect rationalizability

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  • Vincent J. Vannetelbosch

    (CORE, University of Louvain, voie du Roman Pays 34, B-1348 Louvain-la-Neuve, BELGIUM)

  • P. Jean-Jacques Herings

    (Department of Economics, University of Maastricht, Postbus 616, NL-6200 Maastricht,THE NETHERLANDS)

Abstract

Two approaches have been proposed in the literature to refine the rationalizability solution concept: either assuming that a player believes that with small probability her opponents choose strategies that are irrational, or assuming that their is a small amount of payoff uncertainty. We show that both approaches lead to the same refinement if strategy perturbations are made according to the concept of weakly perfect rationalizability, and if there is payoff uncertainty as in Dekel and Fudenberg [J. of Econ. Theory 52 (1990), 243-267]. For both cases, the strategies that survive are obtained by starting with one round of elimination of weakly dominated strategies followed by many rounds of elimination of strictly dominated strategies.

Suggested Citation

  • Vincent J. Vannetelbosch & P. Jean-Jacques Herings, 2000. "The equivalence of the Dekel-Fudenberg iterative procedure and weakly perfect rationalizability," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(3), pages 677-687.
  • Handle: RePEc:spr:joecth:v:15:y:2000:i:3:p:677-687
    Note: Received: 10 December 1998; revised version: 26 April 1999
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    References listed on IDEAS

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    1. Borgers Tilman, 1994. "Weak Dominance and Approximate Common Knowledge," Journal of Economic Theory, Elsevier, vol. 64(1), pages 265-276, October.
    2. Adam Brandenburger & Eddie Dekel, 2014. "Rationalizability and Correlated Equilibria," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 3, pages 43-57, World Scientific Publishing Co. Pte. Ltd..
    3. Dekel, Eddie & Fudenberg, Drew, 1990. "Rational behavior with payoff uncertainty," Journal of Economic Theory, Elsevier, vol. 52(2), pages 243-267, December.
    4. Bernheim, B Douglas, 1984. "Rationalizable Strategic Behavior," Econometrica, Econometric Society, vol. 52(4), pages 1007-1028, July.
    5. Ben-Porath, E., 1992. "Rationality, Nash Equilibrium and Backward Induction in Perfect Information Games," Papers 14-92, Tel Aviv - the Sackler Institute of Economic Studies.
    6. Elchanan Ben-Porath, 1997. "Rationality, Nash Equilibrium and Backwards Induction in Perfect-Information Games," Review of Economic Studies, Oxford University Press, vol. 64(1), pages 23-46.
    7. Vincent J. Vannetelbosch & P. Jean-Jacques Herings, 1999. "Refinements of rationalizability for normal-form games," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(1), pages 53-68.
    8. Gul, Faruk, 1996. "Rationality and Coherent Theories of Strategic Behavior," Journal of Economic Theory, Elsevier, vol. 70(1), pages 1-31, July.
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    Cited by:

    1. Stephen Morris & Satoru Takahashi & Olivier Tercieux, 2012. "Robust Rationalizability Under Almost Common Certainty Of Payoffs," The Japanese Economic Review, Japanese Economic Association, vol. 63(1), pages 57-67, March.
    2. Gilles Grandjean & Ana Mauleon & Vincent Vannetelbosch, 2017. "Strongly rational sets for normal-form games," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(1), pages 35-46, April.
    3. Vannetelbosch, Vincent J., 1996. "Bargaining with an Endogenous Deadline," LIDAM Discussion Papers IRES 1996011, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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    More about this item

    Keywords

    Rationalizability; Refinements.;

    JEL classification:

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

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