Dufwenberg and Kirchsteigers (2004) extends Rabins (1993) theory of reciprocity in a dynamic sense, introducing a rule of revision for players beliefs. The Sequential Reciprocity Equilibrium [SRE] they define can be dynamically inconsistent. In this article it is argued that such dynamic inconsistency is not intrinsically related to issues of reciprocity, but rather to the particular way the beliefsupdating process is modeled. A refinement of the SRE, which is both dynamically consistent and, it is argued, more sound to assumptions usually made in the literature of information economics and philosophy, is proposed.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
10261.
Find related papers by JEL classification: D64 - Microeconomics - - Welfare Economics - - - Altruism D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
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