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The Refined Best Reply Correspondence and Backward Induction
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Dieter Balkenborg
Published/Copyright:
November 30, 2019
Abstract
Fixed points of the (most) refined best reply correspondence, introduced in Balkenborg et al. (2013), in the agent normal form of extensive form games with perfect recall have a remarkable property. They induce fixed points of the same correspondence in the agent normal form of every subgame. Furthermore, in a well-defined sense, fixed points of this correspondence refine even trembling hand perfect equilibria, while, on the other hand, reasonable equilibria that are not weak perfect Bayesian equilibria are fixed points of this correspondence.
Keywords: Subgame perfection; Nash equilibrium refinements; backward induction; sequential rationality
Published Online: 2019-11-30
Published in Print: 2019-02-01
© 2019 by Walter de Gruyter Berlin/Boston
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Keywords for this article
Subgame perfection;
Nash equilibrium refinements;
backward induction;
sequential rationality
Articles in the same Issue
- Issue Information
- Investor Pessimism and the German Stock Market: Exploring Google Search Queries
- Asymmetric Information in Simple Bargaining Games: An Experimental Study
- The Refined Best Reply Correspondence and Backward Induction
- Heterogeneity and Spatial Dependence of Regional Growth in the EU: A Recursive Partitioning Approach
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