Robust Rationalizability Under Almost Common Certainty of Payoffs

16 Pages Posted: 11 Jul 2011

See all articles by Stephen Morris

Stephen Morris

MIT

Satoru Takahashi

National University of Singapore (NUS) - Department of Economics

Olivier Tercieux

Paris-Jourdan Sciences Economiques (PSE)

Date Written: June 29, 2011

Abstract

An action is robustly rationalizable if it is rationalizable for every type who has almost common certainty of payoffs. We illustrate by means of an example that an action may not be robustly rationalizable even if it is weakly dominant, and argue that robust rationalizability is a very stringent refinement of rationalizability. Nonetheless, we show that every strictly rationalizable action is robustly rationalizable. We also investigate how permissive robust rationalizability becomes if we require that players be fully certain of their own payoffs.

Suggested Citation

Morris, Stephen Edward and Takahashi, Satoru and Tercieux, Olivier, Robust Rationalizability Under Almost Common Certainty of Payoffs (June 29, 2011). Economic Theory Center Working Paper No. 017-2011, Available at SSRN: https://ssrn.com/abstract=1881151 or http://dx.doi.org/10.2139/ssrn.1881151

Stephen Edward Morris (Contact Author)

MIT ( email )

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HOME PAGE: http://https://economics.mit.edu/faculty/semorris

Satoru Takahashi

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

Olivier Tercieux

Paris-Jourdan Sciences Economiques (PSE) ( email )

48, BD Jourdan
75014 Paris
France

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