FORWARD INDUCTION AND PUBLIC RANDOMIZATION

Authors
GUL F PEARCE DG
Citation
F. Gul et Dg. Pearce, FORWARD INDUCTION AND PUBLIC RANDOMIZATION, Journal of economic theory, 70(1), 1996, pp. 43-64
Citations number
14
Categorie Soggetti
Economics
Journal title
Journal of economic theory → ACNP
ISSN journal
00220531
Volume
70
Issue
1
Year of publication
1996
Pages
43 - 64
Database
ISI
SICI code
0022-0531(1996)70:1<43:FIAPR>2.0.ZU;2-A
Abstract
We show that ii the set of subgame perfect equilibrium payoffs of a st age game is convexified by the introduction of public random variables , then forward induction loses all its power as an argument for refini ng Nash equilibrium. We establish that our argument does not depend on a convenient choice of off-equilibrium path beliefs. Journal of Econo mic Literature Classification Number: C72. (C) 1996 Academic Press, In c.