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Perfect Bayesian Equilibrium and Sequential Equilibrium

  1. Akira Okada

Published Online: 15 FEB 2011

DOI: 10.1002/9780470400531.eorms0654

Wiley Encyclopedia of Operations Research and Management Science

Wiley Encyclopedia of Operations Research and Management Science

How to Cite

Okada, A. 2011. Perfect Bayesian Equilibrium and Sequential Equilibrium. Wiley Encyclopedia of Operations Research and Management Science. .

Author Information

  1. Hitotsubashi University, Graduate School of Economics, Tokyo, Japan

Publication History

  1. Published Online: 15 FEB 2011

Abstract

Two equilibrium concepts for an extensive-form game are reviewed: a (weak) perfect Bayesian equilibrium and a sequential equilibrium. These equilibrium concepts are defined in terms of a pair comprising a behavioral strategy profile and a system of beliefs so that they satisfy sequential rationality and consistency. A (weak) perfect Bayesian equilibrium requires a weak consistency that the Bayes rule should be applied whenever possible. A sequential equilibrium requires a stronger consistency that uses the trembling-hand approach for a perfect equilibrium.

Keywords:

  • belief;
  • consistency;
  • extensive-form game;
  • sequential equilibrium;
  • trembling-hand approach;
  • (weak) perfect Bayesian equilibrium