Towards a Characterization of Rational Expectations

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Itai Arieli (2008)

R. J. Aumann and J. H. Drèze (2008) define a rational expectation of a player i in a game G as the expected payo of some type of i in some belief system for G in which common knowledge of rationality and common priors obtain. Our goal is to characterize the set of rational expectations in terms of the game's payoff matrix. We provide such a characterization for a specific class of strategic games, called semi-elementary, which includes Myerson's "elementary" games.
  • References (5)

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    [2] | (1987), \Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica 55, 1-18.

    [3] Aumann, R. J. and Dreze, J. H. (2008), \Rational Expectations in Games," American Economic Review, to appear.

    [4] Myerson, R. B. (1997), \Dual Reduction and Elementary Games," Games Econ: Behav: 21, 183-202.

    [5] Shapley, Lloyd S. 1964. \Some Topics in Two-Person Games." In Advances in Game Theory, Annals of Mathematics Studies 52, ed. Melvin

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