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Contemporaneous Perfect Epsilon-Equilibria

Author

Listed:
  • George Mailath

    (Department of Economics, University of Pennsylvania)

  • Andrew Postlewaite

    (Department of Economics, University of Pennsylvania)

  • Larry Samuelson

    (Department of Economics, University of Wisconsin-Madison)

Abstract

We examine contemporaneous perfect epsilon-equilibria, in which a player’s actions after every history, evaluated at the point of deviation from the equilibrium, must be within epsilon of a best response. This concept implies, but is stronger than, Radner’s ex ante perfect epsilon-equilibrium. A strategy profile is a contemporaneous perfect epsilon-equilibrium of a game if it is a subgame perfect equilibrium in a perturbed game with nearly the same payoffs, with the converse holding for pure equilibria.

Suggested Citation

  • George Mailath & Andrew Postlewaite & Larry Samuelson, 2003. "Contemporaneous Perfect Epsilon-Equilibria," PIER Working Paper Archive 03-021, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    • Handle: RePEc:pen:papers:03-021
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    References listed on IDEAS

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    Cited by:

    1. Mehmet Barlo & Guilherme Carmona, 2007. "One - memory in repeated games," Nova SBE Working Paper Series wp500, Universidade Nova de Lisboa, Nova School of Business and Economics.
    2. Martin, Simon & Schlag, Karl H., 2020. "Split it up to create incentives: Investment, public goods and crossing the river," Journal of Economic Theory, Elsevier, vol. 189(C).
    3. Jackson, Matthew O. & Rodriguez-Barraquer, Tomas & Tan, Xu, 2012. "Epsilon-equilibria of perturbed games," Games and Economic Behavior, Elsevier, vol. 75(1), pages 198-216.
    4. Santiago R. Balseiro & Omar Besbes & Gabriel Y. Weintraub, 2019. "Dynamic Mechanism Design with Budget-Constrained Buyers Under Limited Commitment," Operations Research, INFORMS, vol. 67(3), pages 711-730, May.
    5. Schlag, Karl H. & Zapechelnyuk, Andriy, 2017. "Dynamic benchmark targeting," Journal of Economic Theory, Elsevier, vol. 169(C), pages 145-169.
    6. Felix Kubler & Karl Schmedders, 2003. "Approximate Versus Exact Equilibria," Discussion Papers 1382, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    7. Elena Parilina & Georges Zaccour, 2016. "Strategic Support of Node-Consistent Cooperative Outcomes in Dynamic Games Played Over Event Trees," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 18(02), pages 1-16, June.
    8. Martin, Simon & Schlag, Karl, 2017. "Finite Horizon Holdup and How to Cross the River," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168136, Verein für Socialpolitik / German Economic Association.
    9. Karl Schlag & Andriy Zapechelnyuk, 2009. "Decision Making in Uncertain and Changing Environments," Discussion Papers 19, Kyiv School of Economics.
    10. Martin, Simon & Schlag, Karl, 2017. "Finite Horizon Holdup and How to Cross the River," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168136, Verein für Socialpolitik / German Economic Association.
    11. Parilina, Elena M. & Zaccour, Georges, 2022. "Payment schemes for sustaining cooperation in dynamic games," Journal of Economic Dynamics and Control, Elsevier, vol. 139(C).
    12. János Flesch & P. Jean-Jacques Herings & Jasmine Maes & Arkadi Predtetchinski, 2021. "Subgame Maxmin Strategies in Zero-Sum Stochastic Games with Tolerance Levels," Dynamic Games and Applications, Springer, vol. 11(4), pages 704-737, December.
    13. Tóbiás, Áron, 2023. "Rational Altruism," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 50-80.
    14. Tim Kraft & Yanchong Zheng & Feryal Erhun, 2013. "The NGO's Dilemma: How to Influence Firms to Replace a Potentially Hazardous Substance," Manufacturing & Service Operations Management, INFORMS, vol. 15(4), pages 649-669, October.

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    More about this item

    Keywords

    Epsilon equilibrium; ex ante payoff; multistage game; subgame perfect equilibrium;
    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
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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