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Fall back proper equilibrium

Author

Listed:
  • John Kleppe

    (Tilburg University)

  • Peter Borm

    (Tilburg University)

  • Ruud Hendrickx

    (Tilburg University)

Abstract

Proper equilibrium plays a prominent role in the literature on non-cooperative games. The underlying thought experiment in which the players play a passive role is, however, unsatisfying, as it gives no justification for its fundamental idea that severe mistakes are made with a significantly smaller probability than innocuous ones. In this paper, we introduce a more active role for the players, leading to the refinement of fall back proper equilibrium.

Suggested Citation

  • John Kleppe & Peter Borm & Ruud Hendrickx, 2017. "Fall back proper equilibrium," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 25(2), pages 402-412, July.
    • Handle: RePEc:spr:topjnl:v:25:y:2017:i:2:d:10.1007_s11750-017-0447-2
    DOI: 10.1007/s11750-017-0447-2
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    References listed on IDEAS

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    1. Kleppe, John & Borm, Peter & Hendrickx, Ruud, 2012. "Fall back equilibrium," European Journal of Operational Research, Elsevier, vol. 223(2), pages 372-379.
    2. Robson~ Arthur J., 1994. "An Informationally Robust Equilibrium for Two-Person Nonzero-Sum Games," Games and Economic Behavior, Elsevier, vol. 7(2), pages 233-245, September.
    3. Kleppe, J. & Borm, P.E.M. & Hendrickx, R.L.P., 2012. "Fall Back Equilibrium for 2 x n Bimatrix Games," Discussion Paper 2012-044, Tilburg University, Center for Economic Research.
    4. Hillas, John, 1990. "On the Definition of the Strategic Stability of Equilibria," Econometrica, Econometric Society, vol. 58(6), pages 1365-1390, November.
    5. Yamamoto, Yoshitsugu, 1993. "A Path-Following Procedure to Find a Proper Equilibrium of Finite Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 22(3), pages 249-259.
    6. van Damme, E.E.C., 1984. "A relation between perfect equilibria in extensive form games and proper equilibria in normal form games," Other publications TiSEM 3734d89e-fd5c-4c80-a230-5, Tilburg University, School of Economics and Management.
    7. Kohlberg, Elon & Mertens, Jean-Francois, 1986. "On the Strategic Stability of Equilibria," Econometrica, Econometric Society, vol. 54(5), pages 1003-1037, September.
    8. Frank Schuhmacher, 1999. "Proper rationalizability and backward induction," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(4), pages 599-615.
    9. Kleppe, J., 2010. "Modelling interactive behaviour, and solution concepts," Other publications TiSEM b9b96884-5761-48f0-9ee4-4, Tilburg University, School of Economics and Management.
    10. Blume, Lawrence & Brandenburger, Adam & Dekel, Eddie, 1991. "Lexicographic Probabilities and Equilibrium Refinements," Econometrica, Econometric Society, vol. 59(1), pages 81-98, January.
    11. Jurado, I Garcia & Prada Sanchez, J M, 1990. "A Remark on Myerson's Concept of Proper Equilibrium," International Journal of Game Theory, Springer;Game Theory Society, vol. 19(1), pages 11-16.
    12. John Kleppe & Peter Borm & Ruud Hendrickx, 2013. "Fall back equilibrium for $$2 \times n$$ bimatrix games," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 78(2), pages 171-186, October.
    13. Hans Reijnierse & Peter Borm & Mark Voorneveld, 2007. "On ‘Informationally Robust Equilibria’ for Bimatrix Games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(3), pages 539-560, March.
    14. Jean-François Mertens, 1991. "Stable Equilibria—A Reformulation. Part II. Discussion of the Definition, and Further Results," Mathematics of Operations Research, INFORMS, vol. 16(4), pages 694-753, November.
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    Cited by:

    1. Milgrom, Paul & Mollner, Joshua, 2021. "Extended proper equilibrium," Journal of Economic Theory, Elsevier, vol. 194(C).

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