Article,
On the Strategic Stability of Equilibria
Econometrica: Journal of the Econometric Society, 54 (5): 1003--1038 (1986)
Abstract
A basic problem in the theory of noncooperative games is the following:
which Nash equilibria are strategically stable, i.e. self-enforcing,
and does every game have a strategically stable equilibrium? We
list three conditions which seem necessary for strategic stability--backwards
induction, iterated dominance, and invariance--and define a set-valued
equilibrium concept that satisfies all three of them. We prove that
every game has at least one such equilibrium set. Also, we show
that the departure from the usual notion of single-valued equilibrium
is relatively minor, because the sets reduce to points in all generic
games.
