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A Note On Bagwell'S Paradox And Forward Induction In Three Classic Games

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  • JOSÉ LUIS FERREIRA

    (Departamento de Economía, Universidad Carlos III de Madrid, 28903 Getafe, Madrid, Spain)

Abstract

Stackelberg-like games show a situation where there is a clear advantage in moving first. In a thought provoking article, Bagwell [1995] shows that this advantage may not be robust against imperfect observations of the first move. We explore these ideas in the context of forward induction in three classic games, namely, the outside option game, the game of burning a dollar before the battle of the sexes and the beer-quiche game.

Suggested Citation

  • José Luis Ferreira, 2011. "A Note On Bagwell'S Paradox And Forward Induction In Three Classic Games," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 13(01), pages 93-104.
    • Handle: RePEc:wsi:igtrxx:v:13:y:2011:i:01:n:s0219198911002873
    DOI: 10.1142/S0219198911002873
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    References listed on IDEAS

    as
    1. Adolph, B., 1996. "Commitment, Trembling Hand Imperfection and Observability in Games," SFB 373 Discussion Papers 1996,84, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
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    More about this item

    Keywords

    Bagwell's paradox; noise; battle of the sexes; Beer-Quiche game; outside option; forward induction; JEL Numbers: C72; JEL Numbers: G13; JEL Numbers: L13;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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