Econometrica Vol. 78 No. 2 2010
Strongly Consistent Self-Confirming Equilibrium
Abstract
Fudenberg and Levine (1993a) introduced the notion of self-confirming equilibrium, which is generally less restrictive than Nash equilibrium. Fudenberg and Levine also defined a concept of consistency, and claimed in their Theorem 4 that with consistency and other conditions on beliefs, a self-confirming equilibrium has a Nash equilibrium outcome. We provide a counterexample that disproves Theorem 4 and prove an alternative by replacing consistency with a more restrictive concept, which we call strong consistency. In games with observed deviators, self-confirming equilibria are strongly consistent self-confirming equilibria. Hence, our alternative theorem ensures that despite the counterexample, the corollary of Theorem 4 is still valid.
- DOI
- 10.3982/ecta7496
- Volume
- 78
- Issue
- 2
- Pages
- 823-832
- Language
- en
- Sources
- bibtex:phds-export.bib crossref openalex