Minimal farsighted instability.

We propose the notion of minimal farsighted instability to determine the states that are more likely to emerge in the long run when agents are farsighted. A state is minimally farsighted unstable if there is no other state which is more farsightedly stable. To formulate what it means to be more farsightedly stable, we compare states by comparing (in the set inclusion or cardinal sense) their sets of farsighted defeating states. We next compare states in terms of their absorbtiveness by comparing both their sets of farsighted defeating states (i.e. in terms of their stability) and their sets of farsighted defeated states (i.e. in terms of their reachability). A state is maximally farsighted absorbing if there is no other state which is more farsightedly absorbing. We provide general results for characterizing minimally farsighted unstable states and maximally farsighted absorbing states, and we study their relationships with alternative notions of farsightedness. Finally, we use experimental data to show the relevance of the new solution concepts. [ABSTRACT FROM AUTHOR]

Copyright of International Journal of Game Theory is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)