Abstract
A new equilibrium concept for non-cooperative games, based on the assumptions that players are rational and far-sighted, is examined. An outcome is extended non-myopically (XNM) stable for a player if that player is assured that no movecountermove sequence he could initiate by departing unilaterally from that outcome would benefit him. The extended non-myopic (XNM) equilibria of a game, the outcomes which are XNM stable for each player, therefore model permanent (enduring) equilibria in an ongoing conflict.
Algorithms for the identification of XNM equilibria in a 2 × 2 game are presented. The XNM concepts are then applied to three special classes of games (no-conflict games, games of complete opposition, and strict ordinal games) to compare their predictions of long-term stability with the known properties of games in these classes.
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Research supported by Natural Sciences and Engineering Research Council of Canada Grant No. A8974.
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Kilgour, D.M. Equilibria for far-sighted players. Theor Decis 16, 135–157 (1984). https://doi.org/10.1007/BF00125875
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DOI: https://doi.org/10.1007/BF00125875