Generalized Nash equilibrium without common belief in rationality

Andrés Perea y Monsuwé, Christian Bach

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Abstract

We provide an existence result for the solution concept of generalized Nash equilibrium, which can be viewed as the direct incomplete information analogue of Nash equilibrium. Intuitively, a tuple consisting of a probability measure for every player on his choices and utility functions is a generalized Nash equilibrium, whenever some mutual optimality property is satisfied. This incomplete information solution concept is then epistemically characterized in a way that common belief in rationality is neither used nor implied. For the special case of complete information, an epistemic characterization of Nash equilibrium ensues as a corollary.
Original languageEnglish
Article number108526
Number of pages6
JournalEconomics Letters
Volume186
Early online date15 Jul 2019
DOIs
Publication statusPublished - Jan 2020

JEL classifications

  • c72 - Noncooperative Games

Keywords

  • common belief in rationality
  • complete information
  • epistemic characterization
  • epistemic game theory
  • generalized Nash equilibrium
  • Common belief in rationality
  • Epistemic game theory
  • Complete information
  • Interactive epistemology
  • Static games
  • EPISTEMIC CONDITIONS
  • Nash equilibrium
  • Generalized Nash equilibrium
  • Epistemic characterization
  • Solution concepts
  • Incomplete information
  • Existence

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