This chapter is devoted to the basic concepts in dynamic games with incomplete in formation. As in the case of complete information, Bayesian Nash equilibrium allows players to take suboptimal actions in information sets that are not reached in equilib rium. This problem addressed by sequential equilibrium, which explicitly requires that the players play a best reply at every information set (sequential rationality) and that the players' beliefs are "consistent" with the other players' strategies. Here, I will define sequential equilibrium and apply it to some important games.
CITATION STYLE
Szép, J., & Forgó, F. (1985). Games with incomplete information. In Introduction to the Theory of Games (pp. 370–374). Springer Netherlands. https://doi.org/10.1007/978-94-009-5193-8_30
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