Unawareness, Beliefs and Games
Copyright policy )Unawareness, Beliefs and Games
We define a generalized state-space model with interactive unawareness and probabilistic beliefs. Such models are desirable for many potential applications of asymmetric unawareness. We develop Bayesian games with unawareness, define equilibrium, and prove existence. We show how equilibria are extended naturally from lower to higher awareness levels and restricted from higher to lower awareness levels. We use our unawareness belief structure to show that the common prior assumption is too weak to rule out speculative trade in all states. Yet, we prove a generalized "No-trade" theorem according to which there can not be common certainty of strict preference to trade. Moreover, we show a generalization of the "No-agreeing-to-disagree" theorem.
- University College London United Kingdom
- Spanish National Research Council Spain
- THE OPEN UNIVERSITY Israel
- University of California, Davis United States
- Institut für Höhere Studien, Wien - Institute for Advanced Studies, Vienna Austria
Bayesian games, speculative trade, 330, unawareness; awareness; type-space; Bayesian games; incomplete information; equilibrium; common prior; agreement; speculative trade; interactive epistemology, equilibrium, Wissen, Wertpapierspekulation, C72, Information, interactive epistemology, C70, incomplete information, awareness, unawareness, awareness, type-space, Bayesian games,incomplete information, equilibrium, common prior, agreement, speculative trade, interactive epistemology., Wahrnehmung, ddc:330, Erkenntnistheorie, D82, D80, type-space, unawareness, awareness, type-space, Bayesian games, incomplete information, equilibrium, common prior, agreement, speculative trade, interactive epistemology, common prior, agreement, Theorie, unawareness, jel: jel:D80, jel: jel:D82, jel: jel:C70, jel: jel:C72
Bayesian games, speculative trade, 330, unawareness; awareness; type-space; Bayesian games; incomplete information; equilibrium; common prior; agreement; speculative trade; interactive epistemology, equilibrium, Wissen, Wertpapierspekulation, C72, Information, interactive epistemology, C70, incomplete information, awareness, unawareness, awareness, type-space, Bayesian games,incomplete information, equilibrium, common prior, agreement, speculative trade, interactive epistemology., Wahrnehmung, ddc:330, Erkenntnistheorie, D82, D80, type-space, unawareness, awareness, type-space, Bayesian games, incomplete information, equilibrium, common prior, agreement, speculative trade, interactive epistemology, common prior, agreement, Theorie, unawareness, jel: jel:D80, jel: jel:D82, jel: jel:C70, jel: jel:C72
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