Year: 2018
Type: book-chapter
Abstract: In non-cooperative game theory, one of the most common equilibrium concepts is the Subgame Perfect Equilibrium (SPE) (Selten 1965), a refinement of the Nash Equilibrium (Nash 1951). The SPE is defined for dynamic games with perfect information, which are mostly represented in their extensive form. This chapter focuses on a Cournot competition with the predictor. Maybe this explains why most game theoreticians are in this category. The chapter introduces the solution concept corresponding to the equilibrium reached by Perfect-Prediction-rational players: The Perfect Prediction Equilibrium (PPE). It provides to call them Perfect Prediction rationality (PPR) and Nash-Perfect rationality (NPR), the latter being the one commonly accepted as game-theoretical perfect rationality. The chapter describes the Perfect Prediction Equilibrium for all games in extensive form, without chance moves and strict preferences. It suggests that both players are Perfect-Prediction-rational.
Source: Routledge eBooks
Language: English
Topic: Game Theory and Applications
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1796097185