How proper is sequential equilibrium?

George J. Mailath*, Larry Samuelson, Jeroen M. Swinkels

*Corresponding author for this work

Research output: Contribution to journalArticle

7 Scopus citations

Abstract

A strategy profile of a normal form game is proper if and only if it is quasi-perfect in every extensive form (with that normal form). Thus, properness requires optimality along a sequence of supporting trembles, while sequentiality only requires optimality in the limit. A decision-theoretic implementation of sequential rationality, strategic independence respecting equilibrium (SIRE), is defined and compared to proper equilibrium, using lexicographic probability systems. Finally, we give tremble-based characterizations, which do not involve structural features of the game, of the rankings of strategies that underlie proper equilibrium and SIRE. Journal of Economic Literature Classification Numbers: C70, C72.

Original languageEnglish (US)
Pages (from-to)193-218
Number of pages26
JournalGames and Economic Behavior
Volume18
Issue number2
DOIs
StatePublished - Feb 1997

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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