Mixed and Behavioralstrategies. Kuhn's Theorem Perfect and Imperfect Recall R 8.2 Sequential rationa lity and off-equilibrium beliefs Trembling-Hand Perfect equilibrium Consistent Assessments and Sequential Equilibrium R OR Sections 121-12.2 12 O KREPS, D and WILSoN,R (1982): Sequential equilibria, Econometrica, 50, 863-894 SELTEN,R(1975): A Reexamination of the Perfectness Concept for Equilibrium Points in Extensive Games, "InternationalJournalof Game Theory, 4: 25-55 Applications of Sequential Equilibrium 9.1 The Cha in Store Paradox Modelling Reputation Comments: (1)Backward Induction; (2) Plausible beliefs R KREPS, D and WIlsoN,R(1982): Reputation and Imperfect Information, " Journal of Economic Theory 27, 253-279 ROSENTHAL, R(1981): Games of Perfect Information, Predatory Pricing and the Chain-Store Paradox, Journal ofEconomic Theory 25: 92-100 9.2 Sequential and Perfect Bayesian Equilibrium S.E. and P Be An Example: Insider Trading OR. Section 12.3 KYLE, A(1985): Continuous Auctions and Insider Trading, Econometrica 53, 1315 1334 10. Sequential equilibrium A critical Look Consistency The Centipede Game and Backward Induction Strategy and Plans of Action. Variants of sequential rationality Weak Sequential equilibrium RENY, P (1992): Backward Induction, Normal Form Perfection, and Explicable Equilibria, Econometrica 60: 627-649 10.2 Interactive Beliefs Is for Dynamic Games Backward Induction and Common Certa inty of Rationality Weak Rationalizability O BEN-PORATH, E(1997): Rationality, Nash Equilibrium, and Backwards Induction In Perfect-Information Games, " Review of Economic Studies 64, 23-46 11. EXtensive Games: Refinements Forward induction: outside options, burning moneyMixed and Behavioral strategies. Kuhn’s Theorem. Perfect and Imperfect Recall R OR Chapter 11 8.2 Sequential rationality and off-equilibrium beliefs Trembling-Hand Perfect equilibrium Consistent Assessments and Sequential Equilibrium R OR Sections 12.1-12.2, 12.5 O KREPS, D. and WILSON, R. (1982): “Sequential equilibria,” Econometrica, 50, 863-894; SELTEN, R. (1975): “A Reexamination of the Perfectness Concept for Equilibrium Points in Extensive Games,” International Journal of Game Theory, 4:25-55. 9. Applications of Sequential Equilibrium 9.1 The Chain Store Paradox Modelling Reputation Comments: (1) Backward Induction; (2) Plausible beliefs R KREPS, D. and WILSON, R. (1982): “ Reputation and Imperfect Information,” Journal of Economic Theory 27, 253-279 O ROSENTHAL, R. (1981): “Games of Perfect Information, Predatory Pricing and the Chain-Store Paradox,” Journal of Economic Theory 25:92-100. 9.2 Sequential and Perfect Bayesian Equilibrium S.E. and P.B.E. in applications An Example: Insider Trading R OR, Section 12.3 KYLE, A. (1985) : “Continuous Auctions and Insider Trading,” Econometrica 53, 1315- 1334. 10. Sequential Equilibrium: A Critical Look 10.1 Consistency The Centipede Game and Backward Induction Strategy and Plans of Action. Variants of sequential rationality. Weak Sequential Equilibrium R RENY, P. (1992): “Backward Induction, Normal Form Perfection, and Explicable Equilibria,” Econometrica 60:627-649. 10.2 Interactive Beliefs Models for Dynamic Games Backward Induction and Common Certainty of Rationality Weak Rationalizability L O BEN-PORATH, E. (1997): “Rationality, Nash Equilibrium, and Backwards Induction In Perfect-Information Games,” Review of Economic Studies 64, 23-46 11. Extensive Games: Refinements 11.1 Forward induction: outside options, burning money