Comprehensive rationalizability

Aviad Heifetz, Martin Meier, Burkhard C. Schipper

Research output: Contribution to journalArticle

Abstract

We present a new solution concept for strategic games called comprehensive rationalizability that embodies a new version of “common cautious belief in rationality” based on a sound epistemic characterization in a universal type space. Differently from existing iterative strategy elimination procedures in the literature, it should rather be viewed as an iterative strategy demotion procedure as it requires some memory of previously discarded strategies. It refines rationalizability, but it neither refines nor is refined by iterated admissibility. Nevertheless, it coincides with iterated admissibility in many relevant economic applications.

Original languageEnglish
Pages (from-to)185-202
Number of pages18
JournalGames and Economic Behavior
Volume116
Early online date11 May 2019
DOIs
Publication statusPublished - 1 Jul 2019

Keywords

  • Common assumption of rationality
  • Common belief in rationality
  • Iterated admissibility
  • Lexicographic belief systems
  • Rationalizability

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Cite this

Comprehensive rationalizability. / Heifetz, Aviad; Meier, Martin; Schipper, Burkhard C.

In: Games and Economic Behavior, Vol. 116, 01.07.2019, p. 185-202.

Research output: Contribution to journalArticle

Heifetz, Aviad ; Meier, Martin ; Schipper, Burkhard C. / Comprehensive rationalizability. In: Games and Economic Behavior. 2019 ; Vol. 116. pp. 185-202.
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