Aniol Llorente-Saguer

Aniol Llorente-Saguerz

School of Economics and Finance, Queen Mary University of London

Abstract 

Games with imperfect information often feature multiple equilibria, which depend on beliefs o¤ the equilibrium path. Standard selection criteria such
as passive beliefs, symmetric beliefs or wary beliefs rest on ad hoc restrictions on beliefs. We propose a new selection criterion that imposes no restrictions
on beliefs: we select the action pro…le that is supported in equilibrium by the largest set of beliefs. We conduct experiments to test the predictive power
of the existing and our novel selection criteria in two applications: a game of vertical multi-lateral contracting and a game of electoral competition. We …find
that our selection criterion outperforms the other selection criteria.