1992•RePEc: Research Papers in EconomicsRequires access
The One-Deviation Principle for Sequential Rationality
Ebbe Hendon, Hans Jørgen Jacobsen, Birgitte Sloth
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Abstract
In this paper we present a decentralization result which is useful for practical and theoretical work with the concept of sequential equilibrium and related concepts of perfect Bayesian equilibrium. A weak consistency condition which is sufficient to obtain an analogy to the well-known One-Deviation Principle for subgame perfect equilibrium is given.