form a perfect Bayesian equilibrium in the original game. These –rst 3 requirements constitute what is known as a weak perfect Bayesian equilibrium (WPBE). {\displaystyle i} − The only connection between the games is that, by playing in the first day, the players may reveal some information about their costs, and this information might affect the play in the second day. It is only known that each cost is drawn independently at random from some probability distribution. Equilibrium 1 is perverse if In fact, it is a sequential equilibrium… I If t 2 k, no exchange I If t 2
2020 perfect bayesian equilibrium example