Payoff Information and SelfConfirming Equilibrium
In a selfconfirming equilibrium, each player correctly forecasts the actions that opponents will take along the equilibrium path, but may be mistaken about the way that opponents would respond to deviations. Intuitively, this equilibrium concept models the possible steady states of a learning process in which, each time the game is played, players observe only the actions played by their opponents (as opposed to the complete specification of the opponents' strategies) so that they need never receive evidence that their forecasts of offpath play are incorrect. 3 Because self confirming equilibrium (henceforth "SCE") allows beliefs about offpath play to be completely arbitrary, it (like Nash equilibrium) corresponds to a situation in which players have no prior information about the payoff fimctions of their opponents.4 This may be a good approximation of some realworld situations; it is also the obvious way to model play in game theory experiments in which subjects are given no itiormation about opponents' payoffs. In other cases, both in the real world and in the laboratory, it seems plausible that players do have some prior information about their opponents' payoffs. The goal of this paper is to develop a more restrictive version of SCE that incorporates the effects of such prior information. In carrying out this program, a key issue is what sort of prior itiormation about payoffs should be considered. It is well known that predictions based on common certainty of payoffs are not robust to even a small amount of uncertainty. Following Fudenberg, Kreps and Levine (1987), we are interested in the strongest possible assumption that is robust to payoff uncertainty. Past work suggests that this assumption should be that payoffs are almost common certainty in the sense of Monderer and Samet (1989).5 Therefore we start by developing a preliminary concept  rationalizability at reachable nodes  that is robust and incorporates almost common certainty of th
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