Munich Personal RePEc Archive

Perfect Regular Equilibrium

hanjoon michael, jung/j (2010): Perfect Regular Equilibrium.

[img]
Preview
PDF
MPRA_paper_26534.pdf

Download (209Kb) | Preview

Abstract

We propose a revised version of the perfect Bayesian equilibrium in general multi-period games with observed actions. In finite games, perfect Bayesian equilibria are weakly consistent and subgame perfect Nash equilibria. In general games that allow a continuum of types and strategies, however, perfect Bayesian equilibria might not satisfy these criteria of rational solution concepts. To solve this problem, we revise the definition of the perfect Bayesian equilibrium by replacing Bayes' rule with a regular conditional probability. We call this revised solution concept a perfect regular equilibrium. Perfect regular equilibria are always weakly consistent and subgame perfect Nash equilibria in general games. In addition, perfect regular equilibria are equivalent to simplified perfect Bayesian equilibria in finite games. Therefore, the perfect regular equilibrium is an extended and simple version of the perfect Bayesian equilibrium in general multi-period games with observed actions.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.