Equilibrium Selection by Unilateral Deviation Stability

From its very beginning, the theory of equilibrium selection has been based on constructive solution procedures as well as on axiomatic characterizations of solutions. HARSANYI and SELTEN have suggested a set of convincing axioms which allows to select a unique solution in all 2 × 2-bimatrix games with two strict equilibria. This paper tries to generalize this approach. Our concept of unilateral deviation stability gives priority to risks of unilateral deviations, i.e. deviations from an intended behavior by single players. We investigate the general properties of unilateral deviation stability and consider some crucial examples.