subgameperfecten

Subgame-perfect equilibrium, often abbreviated as SPE, is a concept in game theory that describes a strategy profile where each player's strategy is optimal given the strategies of the other players, not just in the original game, but also in every possible subgame of the game. A subgame is a smaller game that can be derived from the original game by deleting some of the initial moves and all the moves that follow them.

In a subgame-perfect equilibrium, players are assumed to know the history of the game up to the current subgame and to act optimally given this history. This concept is particularly useful in dynamic games, where players make decisions sequentially, and the game can be divided into distinct stages or subgames.

The concept of subgame-perfect equilibrium was introduced by Reinhard Selten in 1965. It is a refinement of the Nash equilibrium, which requires that each player's strategy be optimal given the strategies of the other players, but does not necessarily require that the strategy be optimal in every subgame.

Subgame-perfect equilibrium is often used in economic theory to model situations where players have incomplete information about the past, such as in auctions or bargaining situations. It is also used in political science to model situations where players make decisions sequentially, such as in international negotiations or legislative processes.