Subgame Perfect Equilibria and Communication in Stage Gamges
Any stage-game with infinite choice sets can be approximated by finite games obtained as increasingly finer discretizations of the infinite game. The subgame perfect equilibrium outcomes of the finite games converge to a limit distribution. We prove that (i) if the limit distribution is feasible in the limit game, then it is also a subgame perfect equilibrium outcome of the limit game; and (ii) if the limit distribution prescribes sufficiently diffused behavior for first-stage players, then it is a subgame perfect equilibrium outcome of the limit game. These results are potentially useful in determining the existence of subgame perfect equilibria in applications. As an illustration of this potential, it is shown that the addition of cheap talk to the games considered restores the existence of subgame perfect equilibria.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: Box 873806, Tempe, AZ 85287-3806|
Phone: (480) 965-5514
Fax: (480) 965-0748
Web page: http://repec.wpcarey.asu.edu/RePEc/asu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Khan, M. Ali & Rath, Kali P. & Sun, Yeneng, 1999. "On a private information game without pure strategy equilibria1," Journal of Mathematical Economics, Elsevier, vol. 31(3), pages 341-359, April.
When requesting a correction, please mention this item's handle: RePEc:asu:wpaper:2132859. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Steve Salik)
If references are entirely missing, you can add them using this form.