Subjective Equilibrium in Repeated Games

This academic article from Econometrica, published by The Econometric Society and available on JSTOR, explores the concept of subjective equilibrium in the context of repeated games. It contrasts this idea with the more established notion of Nash equilibrium, which assumes players have accurate knowledge of their opponents' strategies. The authors, Ehud Kalai and Ehud Lehrer, propose that subjective equilibrium reflects a scenario where players optimize their strategy based on their personal beliefs about others, which may not be entirely correct. The paper focuses on infinitely repeated perfect-monitoring games and investigates the conditions under which subjective equilibrium behavior aligns with or approximates Nash equilibrium behavior.