From Wikipedia, the free encyclopedia
A non-credible threat is a term used in game theory economics to describe a threat by a player in a sequential game that he would not carry out as it would not be in his best interest to do so.
A non-credible threat is made on the hope that it will be believed, and therefore the threatened undesirable action will not need to be carried out. For a threat to be credible within an equilibrium, whenever a node is reached where a threat should be fulfilled, it will be fulfilled. Those Nash equilibria that rely on non-credible threats can be eliminated through backward induction.
[edit] See also
