Research Summary
Research Summary
Epistemic Conditions for Iterated Admissibility (with H. Jerome Keisler)
Description
Iterated weak dominance, also called iterated admissibility (IA), has long been known as a powerful but conceptually puzzling solution concept. We give an epistemic foundation for IA. That is, we give conditions on the rationality of the players in the game, on what the players assume about one another's rationality, etc., under which the players will choose IA strategies. Since IA gives the backward-induction outcome in perfect-information games and the forward-induction outcome in signalling games, our results also give a strategic-form--in fact, invariant--justification for these extensive-form solution concepts.