Self-Confirming Equilibrium

Abstract

Self-confirming equilibrium differs from Nash equilibrium in allowing players to have incorrect beliefs about how their opponents would play off of the equilibrium path.We provide several examples of ways that self -confirming and Nash equilibria differ.In games with "identified deviators , " all self -confirming equilibrium outcomes can be generated by extensive -form correlated equilibria.In two-player games, self -confirming equilibria with "unitary beliefs" are Nash.1.