The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Nash Equilibrium, Refinements of

  • Srihari Govindan
  • Robert B. Wilson
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2515

Abstract

This article describes ways that the definition of an equilibrium among players’ strategies in a game can be sharpened by invoking additional criteria derived from decision theory. Refinements of John Nash’s 1950 definition aim primarily to distinguish equilibria in which implicit commitments are credible due to incentives. One group of refinements requires sequential rationality as the game progresses. Another ensures credibility by considering perturbed games in which every contingency occurs with positive probability, which has the further advantage of excluding weakly dominated strategies.

Keywords

Backward induction Bayes’ rule Dynamic games Game theory Harsanyi, J. Imperfect information Nash equilibrium Nash, J. Non-cooperative games Perfect information Refinements of Nash equilibrium Sequential rationality Small-worlds criterion Subgame perfection Symmetric games 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Srihari Govindan
    • 1
  • Robert B. Wilson
    • 1
  1. 1.