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AGM-consistency and perfect Bayesian equilibrium. Part I: definition and properties

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  • Giacomo Bonanno

    (Department of Economics, University of California Davis)

Abstract

We provide a general notion of perfect Bayesian equilibrium which can be applied to arbitrary extensive-form games and is intermediate between subgame-perfect equilibrium and sequential equilibrium. The essential ingredient of the proposed definition is the qualitative notion of AGM-consistency, which has an epistemic justification based on the AGM theory of belief revision.

Suggested Citation

  • Giacomo Bonanno, 2010. "AGM-consistency and perfect Bayesian equilibrium. Part I: definition and properties," Working Papers 171, University of California, Davis, Department of Economics.
    • Handle: RePEc:cda:wpaper:171
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    References listed on IDEAS

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    6. Bonanno, Giacomo, 2004. "Memory and perfect recall in extensive games," Games and Economic Behavior, Elsevier, vol. 47(2), pages 237-256, May.
    7. Robert Aumann & Adam Brandenburger, 2014. "Epistemic Conditions for Nash Equilibrium," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 5, pages 113-136, World Scientific Publishing Co. Pte. Ltd..
    8. Hendon, Ebbe & Jacobsen, Hans Jorgen & Sloth, Birgitte, 1996. "The One-Shot-Deviation Principle for Sequential Rationality," Games and Economic Behavior, Elsevier, vol. 12(2), pages 274-282, February.
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    10. Kohlberg, Elon & Reny, Philip J., 1997. "Independence on Relative Probability Spaces and Consistent Assessments in Game Trees," Journal of Economic Theory, Elsevier, vol. 75(2), pages 280-313, August.
    11. Kreps, David M & Ramey, Garey, 1987. "Structural Consistency, Consistency, and Sequential Rationality," Econometrica, Econometric Society, vol. 55(6), pages 1331-1348, November.
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    Cited by:

    1. Jeong-Yoo Kim, 2023. "Proposing New Equilibrium Concepts in Dynamic Games with Noisy Signals," Korean Economic Review, Korean Economic Association, vol. 39, pages 413-443.
    2. Bajoori, Elnaz & Flesch, János & Vermeulen, Dries, 2016. "Behavioral perfect equilibrium in Bayesian games," Games and Economic Behavior, Elsevier, vol. 98(C), pages 78-109.
    3. Giacomo Bonanno, 2016. "Exploring the Gap between Perfect Bayesian Equilibrium and Sequential Equilibrium," Games, MDPI, Open Access Journal, vol. 7(4), pages 1-23, November.
    4. Streufert, Peter A., 2015. "An elementary proof that additive i-likelihood characterizes the supports of consistent assessments," Journal of Mathematical Economics, Elsevier, vol. 59(C), pages 37-46.
    5. Giacomo Bonanno, 2016. "AGM-consistency and perfect Bayesian equilibrium. Part II: from PBE to sequential equilibrium," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(4), pages 1071-1094, November.
    6. Galanis, S. & Ioannou, C. & Kotronis, S., 2019. "Information Aggregation Under Ambiguity: Theory and Experimental Evidence," Working Papers 20/05, Department of Economics, City University London.
    7. Burkhard Schipper, 2014. "AGM-consistency and perfect Bayesian equilibrium. Part II: from PBE to sequential equilibrium," Working Papers 83, University of California, Davis, Department of Economics.
    8. Spyros Galanis & Christos A. Ioannou & Stelios Kotronis, 2023. "Supplementary appendix to Information Aggregation Under Ambiguity: Theory and Experimental Evidence," Working Papers 2023_05, Durham University Business School.
    9. Giacomo Bonanno, 2016. "Exploring the Gap between Perfect Bayesian Equilibrium and Sequential Equilibrium," Games, MDPI, vol. 7(4), pages 1-23, November.
    10. Gisèle Umbhauer & Arnaud Wolff, 2022. "istance in Beliefs and Individually-Consistent Sequential Equilibrium," Working Papers of BETA 2022-37, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    11. Giacomo Bonanno, 2011. "Perfect Bayesian equilibrium. Part II: epistemic foundations," Working Papers 111, University of California, Davis, Department of Economics.
    12. Giacomo Bonanno, 2011. "Perfect Bayesian equilibrium. Part II: epistemic foundations," Working Papers 302, University of California, Davis, Department of Economics.
    13. repec:eid:wpaper:37909 is not listed on IDEAS

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    More about this item

    Keywords

    belief revision; plausibility order; consistency; subgame-perfect equilibrium; sequential equilibrium; Bayesian updating.;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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