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EQUILIBRIA IN NON‐COOPERATIVE GAMES I: PERTURBATIONS BASED REFINEMENTS OF NASH EQUILIBRIUM
Author(s) -
Sadanand Asha B.,
Sadanand Venkatraman
Publication year - 1994
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.1994.tb00588.x
Subject(s) - nash equilibrium , mathematical economics , epsilon equilibrium , trembling hand perfect equilibrium , economics , equilibrium selection , intuition , symmetric equilibrium , solution concept , sequential equilibrium , best response , game theory , repeated game , philosophy , epistemology
The concept of Nash equilibrium is widely used to analyse non‐cooperative games. However, one of the problems with that concept is that many games have multiple equilibria. Recent work has concentrated on reducing or refining the set of Nash equilibria in some games. In this paper, we survey some equilibrium concepts based on perturbations of strategies that refine the set of Nash equilibria. We discuss the pros and cons of each concept and its relationship to the others by the use of numerous examples and intuition. It is hoped that this survey will enable the economist to consider the relevance of a particular equilibrium concept to a given economic model of interest. Journal of Economic Literature Classification Number: C72.