Eventi del

27 2021 12:45 - 14:00
Zoom

Theory and Experiments Series

Faith in Nash Equilibrium: a new take on sequential rationality

Jozsef Sakovics, University of Edinburgh and Universitat de les Illes Balears

Per informazioni o per ricevere il link per partecipare all'evento contattare: elisur.magrini@unibocconi.it

 

Abstract:

We investigate the consequences of formally assuming that players in a game share the belief that they are playing some Nash Equilibrium. In games of perfect information this leads to a refinement of Nash Equilibrium. It always exists but need not be unique. It may not admit Subgame-Perfect Equilibrium (SPE), or the Extensive-Form Rationalizable profile. Imposing subgame perfection (only) on the game restricted to nodes on some equilibrium path leads to uniqueness. Allowing for imperfect information destroys existence. Altogether, our results cast some doubt on the appropriateness of using Nash Equilibrium as a generic solution concept and/or SPE as its refinement.