Markov perfect equilibrium

Markov perfect equilibrium
Solution concept in game theory
Relationship
Subset ofSubgame perfect equilibrium
Significance
Proposed byEric Maskin, Jean Tirole
Used fortacit collusion; price wars; oligopolistic competition

A Markov perfect equilibrium is an equilibrium concept in game theory. It has been used in analyses of industrial organization, macroeconomics, and political economy. It is a refinement of the concept of subgame perfect equilibrium to extensive form games for which a pay-off relevant state space can be identified. The term appeared in publications starting about 1988 in the work of economists Jean Tirole and Eric Maskin.

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