
handle: 10419/150078 , 1807/9417
A refinement of the set of Nash equilibria that satisfies two assumptions is shown to select a subset that is stable in the sense defined by Kohlberg and Mertens. One assumption requires that a selected set is invariant to adjoining redundant strategies and the other is a strong version of backward induction. Backward induction is interpreted as the requirement that each player's strategy is sequentially rational and conditionally admissible at every information set in an extensive-form game with perfect recall, implemented here by requiring that the equilibrium is quasi-perfect. The strong version requires 'truly' quasi-perfection in that each strategy perturbation refines the selection to a quasi-perfect equilibrium in the set. An exact characterization of stable sets is provided for two-player games.
equilibrium selection, C72, ddc:330, Game theory, equilibrium selection, stability, stability, Game theory, jel: jel:C72
equilibrium selection, C72, ddc:330, Game theory, equilibrium selection, stability, stability, Game theory, jel: jel:C72
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