Econ 171 Fall 2008
Lecture 16
November 20
Why SPNE is inadequate
Recall how we originally motivated SPNE with this entry
game:
Out
1,0
In
1
A
2,1
F
−1,−1
2
Figure 1: The entry game
F A
In −1,−1 2,1
Out 1,0 1,0
Figure 2: The entry game in normal form
Out
2,4
RU
1
F
1,1
A
3,3
F
0,2
A
4,3
2
Figure 3: A variant of the entry game.
Definition 1 A belief system in an extensive game is a
function that assigns to each information set a prob-
ability distribution over the histories in that informa-
tion set.
Definition 2 An assessment in an extensive game is a pair
consisting of a strategy profile and a belief system.
1
