In normal-form games, rationalizability (Bernheim [3], Pearce [11]) on its own fails to exclude some very implausible strategy choices. Three main refinements of ra- tionalizability have been proposed in the literature: cautious, perfect, and proper rationalizability. Nevertheless, some of these...

We reconsider Goyal and Moraga-Gonzalez [Rand J. of Econ. 32 (2001), 686-707] model of strategic networks in order to analyze how government policies (e.g. subsidies) will affect the stability and efficiency of networks of R&D collaboration among three firms located in different countries. A...