HO PBE F10 - G AME T HEORY IN THE S OCIAL S CIENCES...

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Unformatted text preview: G AME T HEORY IN THE S OCIAL S CIENCES Political Science 135/Economics 110 Hand out on: Perfect Bayesian Equilibria in Signaling Games In our discussion of plausible behavior in dynamics games, we saw several weeks ago that Nash equilibria could be predicated on incredible threats or promises. We got rid of some of these equilibria by backwards induction in finite games with perfect information. More generally we appealed to subgame perfection. The idea behind subgame perfection is to cut a large game three into smaller pieces which can be treated as separate games (pieces which we called “subgames”) and then require the players to play sensibly in each and every one of these pieces. More precisely, a subgame perfect equilibrium is a strategy profile such that the players’ strategies Nash in each and every subgame. But subgame perfection is not going to be a very powerful way of discarding implausible equilibria if there are not very many subgames, i.e., if we cannot cut the game tree up into very equilibria if there are not very many subgames, i....
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This note was uploaded on 12/25/2010 for the course PO 137 taught by Professor Power during the Fall '10 term at University of California, Berkeley.

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HO PBE F10 - G AME T HEORY IN THE S OCIAL S CIENCES...

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