Tournament-stable equilibria (Q2304203)

The authors introduce tournaments as simultaneous \(n\)-player games based on an \(m\)-player game \(g\). A player meets each group of \(m-1\) opponents \(m!\) times to play \(g\) in alternating roles; the winner of the tournament is the player who attains the highest accumulated score. They explore the relationship between the equilibria of the tournament and the equilibria of the game \(g\) and confirm that tournaments provide a refinement criterion. Moreover, they compare it with standard refinements in the literature and show that it is satisfied by strict equilibria. The authors use their tournament model to study a selection of relevant economic applications, including risk-taking behavior.