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Computing sequential equilibria using agent quantal response equilibria

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Abstract

The limit of any convergent sequence of agent quantal response equilibria is a sequential equilibrium of an extensive game. Using a logarithmic transformation of action probabilities, it is numerically feasible and practical to compute such sequences, and thereby compute good approximations to sequential equilibrium assessments. This paper describes the algorithm to compute the sequences, and outlines the convergence and selection properties of the method.

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Authors and Affiliations

  1. Department of Economics, Texas A&M University, College Station, TX, 77843, USA

    Theodore L. Turocy

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  1. Theodore L. Turocy
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Correspondence to Theodore L. Turocy.

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The author thanks the associate editor and two anonymous referees for helpful comments towards improving the exposition.

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Turocy, T.L. Computing sequential equilibria using agent quantal response equilibria. Econ Theory 42, 255–269 (2010). https://doi.org/10.1007/s00199-009-0443-3

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  • DOI: https://doi.org/10.1007/s00199-009-0443-3

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