The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Jan, 1991, Volume 59, Issue 1
https://doi.org/0012-9682(199101)59:1<81:LPAER>2.0.CO;2-2
p. 81-98
Adam Brandenburger, Eddie Dekel, Lawrence Blume
This paper develops a decision-theoretic approach to normal-form refinements of Nash equilibrium and, in particular, provides characterizations of (normal-form) perfect equilibrium (Selten (1975)) and proper equilibrium (Myerson (1978)). The approach relies on a theory of single-person decision making that is a non-Archimedean version of subjective expected utility theory. According to this theory, each player in a game possesses, in addition to a strategy space and a utility function on outcomes, a vector of probability distributions, called a lexicographic probability system (LPS), on the strategies chosen by the other players. These probability distributions can be interpreted as the player's first-order and higher order theories as to how the game will be played, and are used lexicographically in determining an optimal strategy. We define an equilibirum concept, called lexicographic Nash equilibrium, that extends the notion of Nash equilibrium in that it dictates not only a strategy for each player but also an LPS on the strategies chosen by the other players. Perfect and proper equilibria are described as lexicogrpahic Nash equilibria by placing various restrictions on the LPS's possessed by the players.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
