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On Variations of Perfect Equilibria
Author(s) -
KIM JEONGYOO
Publication year - 2019
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/manc.12224
Subject(s) - mathematical economics , sequential equilibrium , markov perfect equilibrium , robustness (evolution) , trembling hand perfect equilibrium , general equilibrium theory , property (philosophy) , economics , mathematics , equilibrium selection , nash equilibrium , game theory , repeated game , microeconomics , biochemistry , chemistry , philosophy , epistemology , gene
In this paper, we examine relations among various refinements of a perfect equilibrium. First, we compare two refinements of a perfect equilibrium, a strictly perfect equilibrium (SPE) and a truly perfect equilibrium (TPE). We show that true perfectness implies strict perfectness and even strict properness. We also introduce the concept of a restrictive perfect equilibrium allowing only some or all sequences of totally mixed strategies satisfying a certain property. A proper equilibrium is an example of a restrictive perfect equilibrium. Then, true perfectness imposing the most severe robustness against perturbations implies any restrictive perfectness. This proves that every TPE is proper.