game theory Game theory is the study of mathematical models of strategic interactions. It has applications in many fields of social science, and is used extensively in economics, logic, systems science and computer science. Initially, game theory addressed ...

, self-confirming equilibrium is a generalization of

Nash equilibrium In game theory, the Nash equilibrium is the most commonly used solution concept for non-cooperative games. A Nash equilibrium is a situation where no player could gain by changing their own strategy (holding all other players' strategies fixed) ...

for extensive form games, in which players correctly predict the moves their opponents make, but may have misconceptions about what their opponents ''would'' do at information sets that are never reached when the equilibrium is played. Self-confirming equilibrium is motivated by the idea that if a game is played repeatedly, the players will revise their beliefs about their opponents' play if and only if they ''observe'' these beliefs to be wrong. Consistent self-confirming equilibrium is a refinement of self-confirming equilibrium that further requires that each player correctly predicts play at all information sets that can be reached when the player's opponents, but not the player herself, deviate from their equilibrium strategies. Consistent self-confirming equilibrium is motivated by learning models in which players are occasionally matched with "crazy" opponents, so that even if they stick to their equilibrium strategy themselves, they eventually learn the distribution of play at all information sets that can be reached if their opponents deviate.

References

* Game theory equilibrium concepts {{gametheory-stub