A non-equilibrium model of rational strategic behavior that can be viewed as a refinement of (normal form) rationalizability is developed for both normal form and extensive form games. This solution concept is called a τ-theory and is used to analyze the main concerns of the Nash equilibrium refinements literature such as dominance, iterative dominance, extensive form rationality, invariance, and backward induction. The relationship between τ-theories and dynamic learning is investigated. Journal of Economic Literature Classification Number: C72.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics