Subgame perfect equilibrium

Updated: Aug 20, 2021

A refinement of Nash equilibrium used in sequential games. A subgame perfect equilibrium is a set of strategies (one for each of the players) with the property that the strategies constitute a Nash equilibrium for every subgame of the original game. A subgame perfect equilibrium is usually found using backward induction.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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