Myerson, Roger and Weibull, Jörgen W. (2015) Tenable strategy blocks and settled equilibria. Econometrica, vol. 83 (n° 3). pp. 943-976.

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Identification Number : 10.3982/ECTA11048

Abstract

When people interact in familiar settings, social conventions usually develop so that people tend to disregard alternatives outside the convention. For rational players to usually restrict attention to a block of conventional strategies, no player should prefer to deviate from the block when others are likely to act conventionally and rationally inside the block. We explore two set-valued concepts, coarsely and finely tenable blocks, that formalize this notion for finite normal-form games. We then identify settled equilibria, which are Nash equilibria with support in minimal tenable blocks. For a generic class of normal-form games, our coarse and fine concepts are equivalent, and yet they differ from standard solution concepts on open sets of games. We demonstrate the nature and power of the solutions by way of examples. Settled equilibria are closely related to persistent equilibria but are strictly more selective on an open set of games. With fine tenability, we obtain invariance under the insertion of a subgame with a unique totally mixed payoff-equivalent equilibrium, a property that other related concepts have not satisfied.

Item Type: Article
Language: English
Date: May 2015
Refereed: Yes
Place of Publication: Chicago
JEL Classification: C70 - General
C72 - Noncooperative Games
C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
D01 - Microeconomic Behavior - Underlying Principles
D02 - Institutions - Design, Formation, and Operations
D03 - Behavioral Economics; Underlying Principles
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 22 Apr 2016 12:06
Last Modified: 23 Nov 2023 13:25
OAI Identifier: oai:tse-fr.eu:29103
URI: https://publications.ut-capitole.fr/id/eprint/20297
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