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|Title:||The foundation of stability in extensive games with perfect information|
|Source:||Luo, X. (2009). The foundation of stability in extensive games with perfect information. Journal of Mathematical Economics 45 (12) : 860-868. ScholarBank@NUS Repository. https://doi.org/10.1016/j.jmateco.2009.06.005|
|Abstract:||This paper studies the decision-theoretic foundation for the notion of stability in the dynamic context of strategic interaction. We formulate and show that common knowledge of rationality implies a "stable" pattern of behavior in extensive games with perfect information. In the "generic" case, our approach is consistent with Aumann's [Aumann, R.J., 1995. Backward induction and common knowledge of rationality. Games and Economic Behavior 8, 6-19] result that common knowledge of rationality leads to the backward induction outcome.©2009 Elsevier B.V. All rights reserved.|
|Source Title:||Journal of Mathematical Economics|
|Appears in Collections:||Staff Publications|
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