The implications of finite?order reasoning

The epistemic conditions of rationality and m th?order strong belief (R SBR; Battigalli Siniscalchi, 2002) formalize the idea that players engage in contextualized forward?induction reasoning. This paper characterizes behavior consistent with R SBR across all type structures. In particular, a class generic games, R( ? 1)SBR is characterized by new solution concept we call an ?best response sequence ( ?BRS). Such sequences are iterative version extensive?form best sets (Battigalli Friedenberg, 2012). strategies survive rounds rationalizability ?BRS, but there ?BRS's disjoint from former set. As such, inconsistent rationalizability. We use our characterization to draw implications for interpretation experimental data. Specifically, show nontrivial three?repeated Prisoner's Dilemma Centipede games.