LAUSR

In strategic conflicts, the behavior of decision makers (DMs) is affected by their beliefs about how their opponents will respond, how they will counter respond, and more generally by the number of action-reaction steps they consider. In this article, we propose several notions of stability with variable horizon that vary in whether the focal DM and her opponents are allowed to make moves that are immediately disadvantageous, called unilateral disimprovements. Credible maximin stability reflects the assumption that opponents will attempt to deter a focal DM from a move by imposing the strongest possible sanction. We analyze the effects of varying the horizon on this form of stability, and on the relationships among the solution concepts that result. Requiring the focal DM to make only unilateral improvements does not influence the stability of states, but restricting opponents’ responses to unilateral improvements reduces the set of stable states. An application to a water-pricing conflict illustrates the analysis of a graph model using credible maximin stabilities.