In this paper, we demonstrate that the existence of sequential equilibria may depend on the players holding beliefs which are tailored to the respective equilibrium but otherwise difficult to justify. We also discuss potential remedies.

A global game is an incomplete information game where the actual payoff structure is determined by a random draw from a given class of games and where each player makes a noisy observation of the selected game. For 2 x 2 games, it is shown that, when the noise vanishes, iterated elimination of...