Perfect Bayesian Equilibrium and Sequential Equilibrium

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.