an:03759940
Zbl 0483.90092
Kreps, David M.; Wilson, Robert
Sequential equilibria
EN
Econometrica 50, 863-894 (1982).
00146501
1982
j
91A10 91A18
equilibria of extensive games; optimal strategy; information set; equilibrium path; topological structure; Selten's trembling-hand perfect equilibria; perfect equilibrium; sequentially rational strategies; sequential equilibrium
Summary: We propose a new criterion for equilibria of extensive games, in the spirit of Selten's perfectness criteria. This criterion requires that players' strategies be sequentially rational: Every decision must be part of an optimal strategy for the remainder of the game. This entails specification of players' beliefs concerning how the game has evolved for each information set, including informaiton sets off the equilibrium path. The properties of sequential equilibria are developed; in particular, we study the topological structure of the set of sequential equilibria. The connections with Selten's trembling-hand perfect equilibria are given.