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Sequential two-player games with ambiguity
Universität Heidelberg; University of Exeter (formerly at University of Birmingham)
International Economic Review
If players' beliefs are strictly nonadditive, the Dempster–Shafer updating rule can be used to define beliefs off the equilibrium path. We define an equilibrium concept in sequential two-person games where players update their beliefs with the Dempster–Shafer updating rule. We show that in the limit as uncertainty tends to zero, our equilibrium approximates Bayesian Nash equilibrium. We argue that our equilibrium can be used to define a refinement of Bayesian Nash equilibrium by imposing context-dependent constraints on beliefs under uncertainty.
ESRC senior research fellowship scheme, H52427502595
International Economic Review, November 2004, 45, 1,229-261