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Forward induction reasoning revisited

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  • ,

    (Department of Economics, Bocconi University)

  • ,

    (Department of Economics, Arizona State University)

Abstract

Battigalli and Siniscalchi (2002) formalize the idea of forward induction reasoning as "rationality and common strong belief of rationality" (RCSBR). Here, we study the behavioral implications of RCSBR across all type structures. Formally, we show that RCSBR is characterized by a solution concept we call Extensive Form Best Response Sets (EFBRS's). It turns out that the EFBRS concept is equivalent to a concept already proposed in the literature, namely Directed Rationalizability. (See Battigalli and Siniscalchi 2003.) We conclude by applying the EFBRS concept to games of interest.

Suggested Citation

  • , & ,, 2012. "Forward induction reasoning revisited," Theoretical Economics, Econometric Society, vol. 7(1), January.
    • Handle: RePEc:the:publsh:598
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    References listed on IDEAS

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    1. Reny Philip J., 1993. "Common Belief and the Theory of Games with Perfect Information," Journal of Economic Theory, Elsevier, vol. 59(2), pages 257-274, April.
    2. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
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    More about this item

    Keywords

    Epistemic game theory; forward induction; extensive form best response set; directed rationalizability;
    All these keywords.

    JEL classification:

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

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