Abstract

This chapter discusses perfect equilibrium points and lexicographic domination. It discusses the perfect equilibrium point in games in normal form by introducing a lexicographic domination between strategies for players. The lexicographic domination incorporates Selten's trembling hand approach into the ordinary notion of domination between strategies, and it turns out to be equivalent to the local domination. A theorem is proved with respect to the lexicographic domination: A perfect equilibrium point is undominated in n-person games in normal form, and the converse is also true when n + 2. The chapter also presents some examples to show that the lexicographic domination can narrow down the set of undominated equilibrium points in the ordinary sense when there are more than two players in a game.

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