ON THE RELATION BETWEEN GAMES IN EXTENSIVE FORM AND GAMES IN STRATEGIC FORM

Abstract

Ever since the publication of von Neumann and Morgenstern's 'Theory of Games and Economic Behavior' there has been a debate whether, and in what sense, games in extensive form can be reduced to games in normal form. I will provide an argument that the representation of extensive form games by normal form games is in general not adequate. My argument is based on a dynamical concept of genericity (structural stability), which is of importance in evolutionary game theory and the theory of learning in games. Games in extensive form do in general have non-generic dynamical properties, while the dynamics of games in normal form is almost always generic.