Strong belief and forward induction reasoning

Pierpaolo Battigalli; Marciano Siniscalchi

doi:10.1006/jeth.2001.2942

Strong belief and forward induction reasoning

Pierpaolo Battigalli^*, Marciano Siniscalchi

^*Corresponding author for this work

Economics

Research output: Contribution to journal › Article › peer-review

190 Scopus citations

Abstract

We provide a unified epistemic analysis of some forward-induction solution concepts in games with complete and incomplete information. We suggest that forward induction reasoning may be usefully interpreted as a set of assumptions governing the players' belief revision processes, and define a notion of strong belief to formalize these assumptions. Building on the notion of strong belief, we provide an epistemic characterization of extensive-form rationalizability and the intuitive criterion, as well as sufficient epistemic conditions for the backward induction outcome in generic games with perfect information. Journal of Economic Literature Classification Numbers: C72, D82.

Original language	English (US)
Pages (from-to)	356-391
Number of pages	36
Journal	Journal of Economic Theory
Volume	106
Issue number	2
DOIs	https://doi.org/10.1006/jeth.2001.2942
State	Published - Oct 1 2002

Keywords

Conditional belief
Forward induction
Intuitive criterion
Rationalizability
Strong belief

ASJC Scopus subject areas

Economics and Econometrics

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10.1006/jeth.2001.2942

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title = "Strong belief and forward induction reasoning",

abstract = "We provide a unified epistemic analysis of some forward-induction solution concepts in games with complete and incomplete information. We suggest that forward induction reasoning may be usefully interpreted as a set of assumptions governing the players' belief revision processes, and define a notion of strong belief to formalize these assumptions. Building on the notion of strong belief, we provide an epistemic characterization of extensive-form rationalizability and the intuitive criterion, as well as sufficient epistemic conditions for the backward induction outcome in generic games with perfect information. Journal of Economic Literature Classification Numbers: C72, D82.",

keywords = "Conditional belief, Forward induction, Intuitive criterion, Rationalizability, Strong belief",

author = "Pierpaolo Battigalli and Marciano Siniscalchi",

note = "Funding Information: 1This is a significantly expanded and revised version of Battigalli and Siniscalchi [6]. We thank Drew Fudenberg for helpful comments. We also benefited from conversations with Adam Brandenburger, Eddie Dekel, Faruk Gul, and seminar participants at Barcelona, Caltech, Harvard, Michigan, MIT, Northestern, Princeton, Stanford, Tel Aviv, Tilburg, Toulouse, Torino, and UCL. The usual disclaimer applies. Financial support from the European University Institute and Bocconi University (Battigalli) and IGIER–Bocconi University, Kellogg Graduate School of Management, and NSF Grant N. 9911490 (Siniscalchi) is gratefully acknowledged.",

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N2 - We provide a unified epistemic analysis of some forward-induction solution concepts in games with complete and incomplete information. We suggest that forward induction reasoning may be usefully interpreted as a set of assumptions governing the players' belief revision processes, and define a notion of strong belief to formalize these assumptions. Building on the notion of strong belief, we provide an epistemic characterization of extensive-form rationalizability and the intuitive criterion, as well as sufficient epistemic conditions for the backward induction outcome in generic games with perfect information. Journal of Economic Literature Classification Numbers: C72, D82.

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KW - Forward induction

KW - Intuitive criterion

KW - Rationalizability

KW - Strong belief

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Strong belief and forward induction reasoning

Abstract

Keywords

ASJC Scopus subject areas

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