Location of Repository

Epistemic conditions for Bayesian Nash equilibrium, and common knowledge of rationality

By Ben Polak

Abstract

We show that, in games of complete information, the Aumann-Brandenburger (1995) sufficient conditions for Nash equilibrium in beliefs also imply common knowledge of rationality. We then consider beliefs held in games of incomplete information, especially beliefs the players hold, conditioning on other players' types, about other players' actions. We provide sufficient conditions for such beliefs to form a Bayesian Nash equilibrium, a solution concept more suited to such settings. Whether or not these new conditions imply common knowledge of rationality depends on which formal definition of a Bayesian game is used. Out equilibria do not concern beliefs held in some constructed ex ante or extended game, but rather the beliefs held by players of the original incomplete information game about other players' actual preferences, actions and beliefs

Topics: HB Economic Theory
Publisher: Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science
Year: 1997
OAI identifier: oai:eprints.lse.ac.uk:19362
Provided by: LSE Research Online
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://sticerd.lse.ac.uk (external link)
  • http://eprints.lse.ac.uk/19362... (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.