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What is the Trembling Hand Perfect Equilibrium?

The trembling hand perfect equilibrium, as defined in game theory, is a situation or state that takes into consideration the possibility of an unintended move by a player by mistake. The probability of this type of play occurring is very small, and the decision on using this concept in such a case could be inconclusive. This concept was gotten from a refinement of the Nash equilibrium which was created by German economist Rienhard Selten, and was proposed by John Forbes Nash, Jr, a Nobel Memorial Prize winner in Economic Sciences.

How does the Trembling Hand Perfect Equilibrium Work?

This concept, when used in a game of cards, can refer to a playing unintentionally playing the wrong card through error (popularly known as tremble). If a player acknowledges the possibility of an error occurring, they can choose a trembling hand perfect equilibrium that will protect them in case their opponent makes a mistake. Trembling Hand Equilibrium can only be chosen before a move is made, and not after the mistake might have occurred. This concept has many uses in different areas, especially in the macroeconomic theory for economic policy.

Related Topics

• Game Theory
• Traveler's Dilemma
• Prisoner's Dilemma
• Iterated Prisoner's Dilemma
• Nash Equilibrium
• Diner's Dilemma
• Trembling Hand Perfect Equilibrium
• Gambler's Fallacy
• Arrows Impossibility Theorem
• Backward Induction