On the Inconsistency of Equilibrium Refinement

Consistency and optimality together with converse consistency provide an illuminating and novel characterization of the equilibrium concept (Peleg and Tijs, 1996). But (together with non-emptiness) they preclude refinements of the equilibrium notion and selection of a unique equlibrium (norde et al., 1996). We suggest two escape routes: By generalizing the concept of strict equlilibrium we question the practical relevance of the existence requirement for refinements. To allow for equilibrium selection we suggest more complex reduced games which capture the inclinations of "players who already left".