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Existence of valuation equilibria when equilibrium strategies cannot differentiate between equal ties

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  • Wichardt, Philipp C.

Abstract

This paper reconsiders the valuation equilibrium concept (Jehiel and Samet, 2007) and proposes an additional regularity condition concerning the playersʼ equilibrium strategies. The condition, which requires equilibrium strategies to induce the same local behaviour at all nodes with “similar” optimal actions, increases both the predictive power and the internal consistency of the concept — especially when used as a tool to study boundedly rational behaviour in games with imperfect information and/or imperfect recall. It is shown not to conflict with existence.

Suggested Citation

  • Wichardt, Philipp C., 2012. "Existence of valuation equilibria when equilibrium strategies cannot differentiate between equal ties," Games and Economic Behavior, Elsevier, vol. 74(2), pages 709-713.
    • Handle: RePEc:eee:gamebe:v:74:y:2012:i:2:p:709-713
    DOI: 10.1016/j.geb.2011.08.009
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    References listed on IDEAS

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    1. Jehiel, Philippe & Samet, Dov, 2005. "Learning to play games in extensive form by valuation," Journal of Economic Theory, Elsevier, vol. 124(2), pages 129-148, October.
    2. Piccione, Michele & Rubinstein, Ariel, 1997. "On the Interpretation of Decision Problems with Imperfect Recall," Games and Economic Behavior, Elsevier, vol. 20(1), pages 3-24, July.
    3. Piccione, Michele & Rubinstein, Ariel, 1997. "The Absent-Minded Driver's Paradox: Synthesis and Responses," Games and Economic Behavior, Elsevier, vol. 20(1), pages 121-130, July.
    4. , & ,, 2007. "Valuation equilibrium," Theoretical Economics, Econometric Society, vol. 2(2), June.
    5. Wichardt, Philipp C., 2008. "Existence of Nash equilibria in finite extensive form games with imperfect recall: A counterexample," Games and Economic Behavior, Elsevier, vol. 63(1), pages 366-369, May.
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    Cited by:

    1. Seel, Christian & Wichardt, Philipp C., 2012. "How burning money requires a lot of rationality to be effective," Economics Letters, Elsevier, vol. 115(1), pages 111-113.

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    More about this item

    Keywords

    Bounded rationality; Valuation equilibrium; Existence; Imperfect recall;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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