A notion of Nash equilibrium, called event-adapted equilibrium, is defined for non-cooperative, multi-stage games where uncertainty is gradually resolved. All players employ contingent strategies, thus adapting to events when and if they occur, events which cannot be predicted with certainty. The equilibrium notion is taken from stochastic programming. Consequently, strategies are neither open-loop nor subgame perfect: On one hand, the flow of information is utilized; on the other, no provision is made for behavior out of equilibrium.
Published March 1991 , 17 pages