publication . Article . 1987

STRUCTURAL CONSISTENCY, CONSISTENCY, AND SEQUENTIAL RATIONALITY

Garey Ramey; David M. Kreps;
Open Access
  • Published: 01 Jan 1987 Journal: Econometrica, volume 55, page 1,331 (issn: 0012-9682, Copyright policy)
  • Publisher: JSTOR
Abstract
Sequential equilibria comprise consistent beliefs and a sequentially ra tional strategy profile. Consistent beliefs are limits of Bayes ratio nal beliefs for sequences of strategies that approach the equilibrium strategy. Beliefs are structurally consistent if they are rationaliz ed by some single conjecture concerning opponents' strategies. Consis tent beliefs are not necessarily structurally consistent, notwithstan ding a claim by Kreps and Robert Wilson (1982). Moreover, the spirit of structural consistency conflicts with that of sequential rationali ty. One avoids these difficulties by weakening structural consistency to allow convex combinations of opponent...
Subjects
free text keywords: Economics and Econometrics, Structural consistency, Conjecture, Rationality, Sequential equilibrium, Bayes' theorem, Mathematical economics, Economic equilibrium, Non-cooperative game, Mathematics, Game theory
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