A General, Practicable Definition of Perfect Bayesian Equilibrium

S-Tier
Journal: Review of Economic Studies
Year: 2021
Volume: 88
Issue: 3
Pages: 1503-1540

Authors (2)

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

The communication revelation principle (RP) of mechanism design states that any outcome that can be implemented using any communication system can also be implemented by an incentive-compatible direct mechanism. In multistage games, we show that in general the communication RP fails for the solution concept of sequential equilibrium (SE). However, it holds in important classes of games, including single-agent games, games with pure adverse selection, games with pure moral hazard, and a class of social learning games. For general multistage games, we establish that an outcome is implementable in SE if and only if it is implementable in a canonical Nash equilibrium in which players never take codominated actions. We also prove that the communication RP holds for the more permissive solution concept of conditional probability perfect Bayesian equilibrium.

Technical Details

RePEc Handle
repec:oup:restud:v:88:y:2021:i:3:p:1503-1540.
Journal Field
General
Author Count
2
Added to Database
2026-01-29