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Payoff Information and Self-Confirming Equilibrium

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  • Levine, David
  • Dekel, Eddie
  • Fudenberg, Drew

Abstract

In a self-confirming equilibrium, each player correctly forecasts the actions that opponents will take along the equilibrium path, but may be mistaken about the way that opponents would respond to deviations. This paper develops a refinement of self-confirming equilibrium in which players use information about opponents' payoffs in forming beliefs about the way that opponents play off of the equilibrium path. We show that this concept is robust to payoff uncertainty. We also discuss its relationship to other concepts and show that it is closely related to assuming almost common certainty of payoffs in an epistemic model with independent beliefs.

Suggested Citation

  • Levine, David & Dekel, Eddie & Fudenberg, Drew, 1999. "Payoff Information and Self-Confirming Equilibrium," Scholarly Articles 3200614, Harvard University Department of Economics.
    • Handle: RePEc:hrv:faseco:3200614
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    References listed on IDEAS

    as
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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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