Axiomatic Equilibrium Selection for Generic Two-Player Games

60 Pages Posted: 12 Jun 2009 Last revised: 27 May 2011

See all articles by Srihari Govindan

Srihari Govindan

University of Rochester

Robert Wilson

Stanford Graduate School of Business

Date Written: May 24, 2011

Abstract

We impose three conditions on refinements of the Nash equilibria of finite games with perfect recall that select closed connected subsets, called solutions. A. Each equilibrium in a solution uses undominated strategies; B. Each solution contains a quasi-perfect equilibrium; C. The solutions of a game map to the solutions of an embedded game, where a game is embedded if each player’s feasible strategies and payoffs are preserved by a multilinear map. We prove for games with two players and generic payoffs that these conditions characterize each solution as an essential component of equilibria in undominated strategies, and thus a stable set as defined by Mertens (1989).

Suggested Citation

Govindan, Srihari and Wilson, Robert B., Axiomatic Equilibrium Selection for Generic Two-Player Games (May 24, 2011). Stanford University Graduate School of Business Research Paper No. 2021(R), Available at SSRN: https://ssrn.com/abstract=1418183 or http://dx.doi.org/10.2139/ssrn.1418183

Srihari Govindan (Contact Author)

University of Rochester ( email )

Department of Economics
Rochester, NY NY 14627
United States
5852757214 (Phone)

Robert B. Wilson

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-723-8620 (Phone)
650-725-7979 (Fax)

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