A Strategic Foundation for Proper Equilibrium

Abstract: Proper equilbrium plays an importent role in the literature on non-cooperative games. The underlying thought experiment is, however, unsatisfying, as it gives no justification for its fundamental idea that severe mistakes are made with a significantly smaller probability than innocuous ones. In this paper we provide a justification for this idea based on strategic choices of the players. In this way we provide a strategic foundation for proper equilibrium.