Non-credible threat
A non-credible threat is a term used in game theory and economics to describe a threat in a sequential game that a rational player would not actually carry out, because it would not be in his best interest to do so.
From Wikipedia, the free encyclopedia Illustration that shows the difference between a SPNE and another NE. The blue equilibrium is not subgame perfect because player two makes a non-credible threat at 2(2) to be unkind (U). A non-credible threat is a term used in game theory and economics to describe a threat in a sequential game that a rational player would not actually carry out, because it would not be in his best interest to do so. A threat, and its counterpart – a commitment, are both defined by American economist and Nobel prize winner, T.C. Schelling, who stated that: "A announces…
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