Equilibrium Selection in Auctions and High Stakes Games

S-Tier
Journal: Econometrica
Year: 2018
Volume: 86
Issue: 1
Pages: 219-261

Authors (2)

Paul Milgrom (Stanford University) Joshua Mollner (not in RePEc)

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We introduce the test‐set equilibrium refinement of Nash equilibrium to formalize the idea that players contemplate only deviations from equilibrium play in which a single competitor plays a non‐equilibrium best response. We then apply this refinement to three well‐known auction games, comparing our findings to similar ones previously obtained by specialized equilibrium selections. We also introduce a theory of high stakes versions of games, in which strategies are first proposed and then subjected to a potentially costly review‐and‐revise process. We demonstrate a sense in which the test‐set equilibria emerge from such processes when the cost of revision is small.

Technical Details

RePEc Handle
repec:wly:emetrp:v:86:y:2018:i:1:p:219-261
Journal Field
General
Author Count
2
Added to Database
2026-01-26