TY - JOUR
T1 - Payoff Information and Self-Confirming Equilibrium
AU - Dekel, Eddie
AU - Fudenberg, Drew
AU - Levine, David K.
N1 - Funding Information:
1We thank Farak Gul, an associate editor, two referees, and seminar participants at Carlos III University, Stanford GSB, UCLA, and University College, London for helpful comments. Financial support from the UCLA Academic Senate, and NSF Grants SBR-93-20695, SBR-9409180, and SBR-94-09302 are gratefully acknowledged. A portion of this research was conducted while Dekel and Levine were visiting the School of Economics Tel-Aviv University.
PY - 1999/12
Y1 - 1999/12
N2 - 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. Journal of Economic Literature Classification Numbers: C72, D84.
AB - 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. Journal of Economic Literature Classification Numbers: C72, D84.
UR - http://www.scopus.com/inward/record.url?scp=0001279276&partnerID=8YFLogxK
U2 - 10.1006/jeth.1999.2576
DO - 10.1006/jeth.1999.2576
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AN - SCOPUS:0001279276
SN - 0022-0531
VL - 89
SP - 165
EP - 185
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 2
ER -