Title

The Equivalence of the Dekel-Fudenberg Iterative Procedure and Weakly Perfect Rationalizability

Document Type

Discussion Paper

Publication Date

3-1-1998

CFDP Number

1173

CFDP Revision Date

1998-07-01

CFDP Pages

11

Abstract

Two approaches have been proposed in the literature to refine the rationalizability solution concept: either assuming that players make small errors when playing their strategies, or assuming that their is a small amount of payoff uncertainty. We show that both approaches lead to the same refinement if errors are made according to the concept of weakly perfect rationalizability, and there is payoff uncertainty as in Dekel and Fudenberg [ Journal of Economic Theory (1990), 52: 243–267]. For both cases, the strategies that survive are obtained by starting with one round of elimination of weakly dominated strategies followed by many rounds of elimination of strictly dominated strategies.

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