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Information-Invariant Equilibria of Extensive Games

Author

Listed:
  • Börgers Tilman M

    (University of Michigan, tborgers@umich.edu)

  • McQuade Timothy

    (University of Michigan, tmcquade@umich.edu)

Abstract

The paper studies the concept of ``ex post equilibrium" that has recently become popular in literature on auctions, mechanism design and implementation. We ask how one should define ex post equilibrium if one wants to consider extensive games, such as dynamic auctions, and if one wants to include sequential rationality in the equilibrium definition. As it turns out, this raises some conceptual questions that are not present in the static setting. We are lead to introduce three different definitions - all variations of what we call ``information-invariant equilibrium." One of these three definitions is equivalent to ``ex post equilibrium." In static games the three definitions coincide. In extensive games they do not - if we impose sequential rationality. Our main purpose is to make a methodological contribution to game theory, but we illustrate the relevance of this contribution by applying our concepts to several auction games.

Suggested Citation

  • Börgers Tilman M & McQuade Timothy, 2007. "Information-Invariant Equilibria of Extensive Games," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 7(1), pages 1-31, December.
    • Handle: RePEc:bpj:bejtec:v:7:y:2007:i:1:n:42
    DOI: 10.2202/1935-1704.1409
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    Citations

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    Cited by:

    1. Harrison Cheng & Guofu Tan, 2010. "Asymmetric common-value auctions with applications to private-value auctions with resale," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 45(1), pages 253-290, October.
    2. Penta, Antonio, 2015. "Robust dynamic implementation," Journal of Economic Theory, Elsevier, vol. 160(C), pages 280-316.
    3. Dirk Bergemann & Stephen Morris, 2007. "Belief Free Incomplete Information Games," Cowles Foundation Discussion Papers 1629, Cowles Foundation for Research in Economics, Yale University.

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