Strict robustness to incomplete information

We study a strict version of the notion of equilibrium robustness by Kajii and Morris (Econometrica 65:1283–1309, 1997) that allows for a larger class of incomplete information perturbations of a given complete information game, where with high probability, players believe that their payoffs are clo...

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Bibliographic Details
Published in:Japanese economic review (Oxford, England) England), 2023-07, Vol.74 (3), p.357-376
Main Authors: Morris, Stephen, Oyama, Daisuke, Takahashi, Satoru
Format: Article
Language:English
Subjects:
Development Economics
Econometrics
Economic History
Economics
Economics and Finance
Incomplete
Information
Macroeconomics/Monetary Economics//Financial Economics
Microeconomics
Robustness
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Summary:We study a strict version of the notion of equilibrium robustness by Kajii and Morris (Econometrica 65:1283–1309, 1997) that allows for a larger class of incomplete information perturbations of a given complete information game, where with high probability, players believe that their payoffs are close to (but may be different from) those of the complete information game. We show that a strict monotone potential maximizer of a complete information game is strictly robust if either the game or the associated strict monotone potential is supermodular, and that the converse also holds in all binary-action supermodular games.
ISSN:1352-4739
1468-5876
DOI:10.1007/s42973-023-00136-3