Self-confirming equilibrium

In game theory, self-confirming equilibrium is a generalization of Nash equilibrium 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. Informally, 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.

Self-confirming equilibrium
A solution concept in game theory
Relationship
Subset of	Rationalizability
Superset of	Nash equilibrium
Significance
Proposed by	Drew Fudenberg and David K. Levine
Used for	Extensive-form games

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

• Fudenberg, Drew; Levine, David K. (1993). "Self-Confirming Equilibrium". Econometrica. 61 (3): 523–545. JSTOR 2951716.