Checking single-step deviations suffices to verify a sequential equilibrium

Evidence

To establish that the LMSS is a symmetric sequential equilibrium strategy, we again appeal to the Optimality Principle of Dynamic Programming. If we show that there is no point at which a single change in the trader’s current action only (followed by later adherence to the LMSS) can raise the trader’s expected payoff at that point, then there is no point at which some more complicated deviation can be profitable, either. — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 102

To establish that the LMSS is a symmetric sequential equilibrium strategy, we again appeal to the Optimality Principle of Dynamic Programming. If we show that there is no point at which a single change in the trader’s current action only (followed by later adherence to the LMSS) can raise the trader’s expected payoff at that point, then there is no point at which some more complicated deviation can be profitable, either. — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 102

Categorization

• DEFINE: This is the one-shot deviation principle stated in compact form — a key workhorse of game-theoretic equilibrium verification.
• corroborated: 2 independent passages support this claim — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 102