This note shows that the loss deviations in Selten's (1995) risk dominance measure are the same as the arguments of the probability of a strategy that supports a sequential equilibrium. Risk dominance is used to select among Nash equilibria, while sequential equilibrium, which is stronger than...

We study the conjecture that increasing market volatility leads to larger coalitions in an oligopoly. Here, coalition formation decisions are made in a noncooperative game by risk averse firms. They use a sequential offer-counter-offer procedure initiated by Selten and Rubinstein. We find that...

We study the conjecture that increasing market volatility leads to larger coalitions in an oligopoly. Here, coalition formation decisions are made in a noncooperative game by risk averse firms. They use a sequential offer-counter-offer procedure initiated by Selten and Rubinstein. We find that...