Equilibrium Refinement in Dynamic Voting Games
Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)
Northwestern University - Kellogg School of Management; NBER
University of Chicago - Irving B. Harris Graduate School of Public Policy Studies; Higher School of Economics; Centre for Economic Policy Research (CEPR)
October 16, 2009
MIT Department of Economics Working Paper No. 09-26
We propose two related equilibrium refinements for voting and agenda-setting games. Sequentially Weakly Undominated Equilibrium (SWUE) and Markov Trembling Hand Perfect Equilibrium (MTHPE), and show how these equilibrium concepts eliminate non-intuitive equilibria that arise naturally in dynamic voting games and games in which random or deterministic sequences of agenda-setters make offers to several players. We establish existence of these equilibria in finite and infinite (for MTHPE) games, provide a characterization of the structure of equilibria, and clarify the relationship between the two concepts. Finally, we show how these concepts can be applied in a dynamic model of endogenous club formation.
Number of Pages in PDF File: 28
Keywords: voting, agenda-setting games, Markov trembling-hand perfect equilibrium
JEL Classification: D72, C73
Date posted: October 19, 2009
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