Sequential Equilibria and Stable Sets of Beliefs

A stable set of beliefs is defined to be a subset of the set of sequential equilibria such that for any equilibrium in the subset the beliefs and/or actions at any information set should be consistent with the equilibria in the subset that reach that information set. Further, any sequential equilibrium that is not in the subset disagrees, at some unreached information set, with the equilibria of the subset that do reach that information set. The behavior of this solution is examined in a number of examples and is contrasted with the behavior of other solution concepts. Journal of Economic Literature Classification Numbers: C72.