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American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Sequential Cursed Equilibrium

  • Shani Cohen
  • Shengwu Li
American Economic Review
vol. 116, no. 3, March 2026
(pp. 934–76)
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Abstract

We propose an extensive-form solution concept, with players who neglect information from hypothetical events but make inferences from observed events. Our concept modifies cursed equilibrium (Eyster and Rabin 2005) and allows that players can be cursed about endogenous information.

Citation

Cohen, Shani, and Shengwu Li. 2026. "Sequential Cursed Equilibrium." American Economic Review 116 (3): 934–76. DOI: 10.1257/aer.20230309

Additional Materials

JEL Classification

  • C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
  • D44 Auctions
  • D71 Social Choice; Clubs; Committees; Associations
  • D81 Criteria for Decision-Making under Risk and Uncertainty
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
  • D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making