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The algebraic geometry of perfect and sequential equilibrium: an extension

Author

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  • Xiao Luo

    (National University of Singapore)

  • Xuewen Qian

    (University of Nottingham Ningbo)

  • Yang Sun

    (Sichuan University)

Abstract

We extend the generic equivalence result of Blume and Zame (Econometrica 62:783–794, 1994) to a broader context of perfectly and sequentially rational strategic behavior (including equilibrium and nonequilibrium behavior) through a unifying solution concept of “mutually acceptable course of action” (MACA) proposed by Greenberg et al. (Econ Theory 40:91–112, 2009. https://doi.org/10.1007/s00199-008-0349-5 ). As a by-product, we show, in the affirmative, Dekel et al.’s (J Econ Theory 89:165–185, 1999) conjecture on the generic equivalence between the sequential and perfect versions of rationalizable self-confirming equilibrium.

Suggested Citation

  • Xiao Luo & Xuewen Qian & Yang Sun, 2021. "The algebraic geometry of perfect and sequential equilibrium: an extension," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(2), pages 579-601, March.
    • Handle: RePEc:spr:joecth:v:71:y:2021:i:2:d:10.1007_s00199-020-01259-z
    DOI: 10.1007/s00199-020-01259-z
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    More about this item

    Keywords

    Extensive forms; Generic payoffs; Perfect rationality; Sequential rationality; MACA; Semi-algebraic sets;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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