Abstract
We present a new solution concept for strategic games called comprehensive rationalizability that embodies a new version of “common cautious belief in rationality” based on a sound epistemic characterization in a universal type space. Differently from existing iterative strategy elimination procedures in the literature, it should rather be viewed as an iterative strategy demotion procedure as it requires some memory of previously discarded strategies. It refines rationalizability, but it neither refines nor is refined by iterated admissibility. Nevertheless, it coincides with iterated admissibility in many relevant economic applications.
| Original language | English |
|---|---|
| Pages (from-to) | 185-202 |
| Number of pages | 18 |
| Journal | Games and Economic Behavior |
| Volume | 116 |
| DOIs | |
| State | Published - Jul 2019 |
Bibliographical note
Funding Information:We thank Byung Soo Lee, Marciano Siniscalchi, Emiliano Catonini, Nicodemo De Vito, four reviewers, and participants in seminars at MEDS, Paris School of Economics, Maastricht, Innsbruck, and Corvinus University, at GAMES 2012, and LOFT 2012 for helpful comments. The first draft was developed when Aviad visited MEDS department at Northwestern University, which we thank for its hospitality. Burkhard is grateful for financial support through NSF CCF-1101226 and NSF SES-0647811.☆ We thank Byung Soo Lee, Marciano Siniscalchi, Emiliano Catonini, Nicodemo De Vito, four reviewers, and participants in seminars at MEDS, Paris School of Economics, Maastricht, Innsbruck, and Corvinus University, at GAMES 2012, and LOFT 2012 for helpful comments. The first draft was developed when Aviad visited MEDS department at Northwestern University, which we thank for its hospitality. Burkhard is grateful for financial support through NSF CCF-1101226 and NSF SES-0647811.
Publisher Copyright:
© 2019 Elsevier Inc.
Keywords
- Common assumption of rationality
- Common belief in rationality
- Iterated admissibility
- Lexicographic belief systems
- Rationalizability