Rationalizable Strategic Behavior and the Problem of Perfection

This paper explores the fundamental problem of what can be inferred about the outcome of a noncooperative game, from the rationality of the players and from the information they possess. The answer is summarized in a solution concept called rationalizability. Strategy profiles that are rationalizabl...

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Bibliographic Details
Published inEconometrica Vol. 52; no. 4; pp. 1029 - 1050
Main Author Pearce, David G.
Format Journal Article
LanguageEnglish
Published Menasha, Wis The Econometric Society 01.07.1984
George Banta Pub. Co. for the Econometric Society
Blackwell Publishing Ltd
Subjects
Equilibrium
Expected utility
Extensive form games
Game theory
Games
Mixed strategy
Nash equilibrium
Normal form games
Perfection
Rationality
Reason
Strategic behavior
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Summary:This paper explores the fundamental problem of what can be inferred about the outcome of a noncooperative game, from the rationality of the players and from the information they possess. The answer is summarized in a solution concept called rationalizability. Strategy profiles that are rationalizable are not always Nash equilibria; conversely, the information in an extensive form game often allows certain "unreasonable" Nash equilibria to be excluded from the set of rationalizable profiles. A stronger form of rationalizability is appropriate if players are known to be not merely "rational" but also "cautious."
ISSN:0012-9682
1468-0262
DOI:10.2307/1911197