Belief-based equilibrium
نویسندگان
چکیده
We introduce a new solution concept for short-sighted players engaging in a repeated interaction: a Belief-based equilibrium (BBE). In a BBE, players optimize myopically given their beliefs which are not necessarily correct, but are not contradicted by the data. We show that, if the stage game has a unique correlated equilibrium then the play of a BBE resembles a Nash equilibrium play. However, a BBE may not be a Nash equilibrium. In particular, in a BBE players may play deterministically when the only Nash equilibrium is in mixed strategies. 2003 Elsevier Inc. All rights reserved. JEL classification: D83
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عنوان ژورنال:
- Games and Economic Behavior
دوره 47 شماره
صفحات -
تاریخ انتشار 2004