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P-Stable Equilibrium : Definition and Some Properties

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  • Desgranges, Gabriel

    (Université de Cergy-Pontoise)

  • Ghosal, Sayantan

    (University of Warwick)

Abstract

We define a continuous index of strategic stability,p.stability, which requires equilibrium to be the unique outcome compatible with common knowledge of rationality and common knowledge of p.beliefs (beliefs that put probability at least p on the equilibrium profile). We show that every equilibrium (within a large class) is p-stable for some p

Suggested Citation

  • Desgranges, Gabriel & Ghosal, Sayantan, 2010. "P-Stable Equilibrium : Definition and Some Properties," The Warwick Economics Research Paper Series (TWERPS) 952, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:952
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    References listed on IDEAS

    as
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    Cited by:

    1. Desgranges, Gabriel & Gauthier, Stéphane, 2016. "Rationalizability and efficiency in an asymmetric Cournot oligopoly," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 163-176.
    2. George W Evans & Roger Guesnerie & Bruce McGough, 2019. "Eductive Stability in Real Business Cycle Models," Economic Journal, Royal Economic Society, vol. 129(618), pages 821-852.

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    More about this item

    Keywords

    common knowledge ; strategic uncertainty ; rationalizability. JEL Classification: C70 ; D84;
    All these keywords.

    JEL classification:

    • C - Mathematical and Quantitative Methods

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