Weak Atomic Continuity and Subgame Perfection

Abstract

Subgame-perfect equilibrium need not exist in continuous games with perfect information when Nature moves. Under standard regularity assumptions, we prove that weak atomic continuity of Nature's transition probabilities yields a measurable pure-strategy subgame-perfect equilibrium for finite and infinite horizons. The condition, originating in the population genetics literature, is necessary for the existence of subgame-perfect equilibrium uniformly over the remaining primitives: whenever this condition is violated, one can construct a dynamic game with no subgame-perfect equilibrium, even in behavioral strategies. The proof preserves compactness and upper hemicontinuity of continuation payoff correspondences under integration without requiring convexity.