A Comparison of Cursed Sequential Equilibrium and Sequential Cursed Equilibrium: Different Concepts of Cursedness in Dynamic Games

TL;DR

This paper systematically compares two recent extensions of Cursed Equilibrium—Cursed Sequential Equilibrium and Sequential Cursed Equilibrium—highlighting their conceptual differences and implications for dynamic games.

Contribution

It clarifies the conceptual foundations and technical distinctions between CSE and SCE, addressing limitations of static Cursed Equilibrium in dynamic settings.

Findings

CSE and SCE differ in their notions of cursedness.

They have distinct belief updating mechanisms.

Their treatment of public histories varies significantly.

Abstract

Cursed Equilibrium of Eyster and Rabin (2005) has been a leading theory for explaining winner's-curse-type behavior in static Bayesian games, but it faces conceptual limitations when applied to dynamic games. Two recent extensions, Cursed Sequential Equilibrium (CSE) by Fong, Lin and Palfrey (2025) and Sequential Cursed Equilibrium (SCE) by Cohen and Li (2026), address these limitations in fundamentally different ways. Complementing these two papers, this paper provides a systematic comparison of CSE and SCE, clarifying their conceptual foundations and technical implications, including their notions of cursedness, belief updating, and treatment of public histories.