Refinements of the Nash equilibrium concept
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Selten's concept of perfect equilibrium for normal form games is reviewed, and a new concept of proper equilibrium is defined. It is shown that the proper equilibria form a nonempty subset of the perfect equilibria, which in turn form a subset of the Nash equilibria. An example is given to show that these inclusions may be strict.
KeywordsNash Equilibrium Normal Form Economic Theory Game Theory Nonempty Subset
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