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Self-enforcing agreements and forward induction reasoning
The Review of Economic Studies ( IF 7.833 ) Pub Date : 2020-08-25 , DOI: 10.1093/restud/rdaa051
Emiliano Catonini 1
Affiliation  

In dynamic games, players may observe a deviation from a pre-play, possibly incomplete, non-binding agreement before the game is over. The attempt to rationalize the deviation may lead players to revise their beliefs about the deviator’s behavior in the continuation of the game. This instance of forward induction reasoning is based on interactive beliefs about not just rationality, but also the compliance with the agreement itself. I study the e¤ects of such rationalization on the selfenforceability of the agreement. Accordingly, outcomes of the game are deemed implementable by some agreement or not. Conclusions depart substantially from what the traditional equilibrium re…nements suggest. A non subgame perfect equilibrium outcome may be induced by a selfenforcing agreement, while a subgame perfect equilibrium outcome may not. The incompleteness of the agreement can be crucial to implement

中文翻译:

自我执行协议和前向归纳推理

在动态游戏中,玩家可能会在游戏结束前观察​​到与赛前协议的偏差,可能是不完整的、不具约束力的协议。将偏差合理化的尝试可能会导致玩家在游戏的继续过程中修正他们对偏差者行为的看法。这个正向归纳推理的实例不仅基于关于理性的交互信念,还基于对协议本身的遵守。我研究了这种合理化对协议自我可执行性的影响。因此,游戏的结果是否可以通过某种协议被认为是可实施的。结论与传统的均衡改进建议大相径庭。非子博弈完美均衡结果可能由自我强制协议引起,而子博弈完美均衡结果可能不会。
更新日期:2020-08-25
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