Rationalizable Strategic Behavior and the Problem of Perfection

This paper explores the fundamental problem of what can be inferred about the outcome of a noncooperative game, from the rationality of the players and from the information they possess. The answer is summarized in a solution concept called rationalizability. Strategy profiles that are rationalizable are not always Nash equilibria; conversely, the information in an extensive form game often allows certain "unreasonable" Nash equilibria to be excluded from the set of rationalizable profiles. A stronger form of rationalizability is appropriate if players are known to be not merely "rational" but also "cautious."