Awareness and equilibrium

There has been a recent surge of interest among economists in developing models of doxastic states that can account for some aspects of human cognitive limitations that are ignored by standard formal models, such as awareness. Epistemologists purport to have a principled reason for ignoring the question of awareness: under the equilibrium conception of doxastic states they favour, a doxastic state comprises the doxastic commitments an agent would recognise were he fully aware, so the question of awareness plays no role. The objective of this paper is to scrutinize this argument.Bounded rationality; awareness; doxastic states; cognitive equilibrium; belief change; formal epistemology.

Analysis of an epidemic model with awareness decay on regular random networks

The existence of a die-out threshold (different from the classic disease-invasion one) defining a region of slow extinction of an epidemic has been proved elsewhere for susceptible-aware-infectious-susceptible models without awareness decay, through bifurcation analysis. By means of an equivalent mean-field model defined on regular random networks, we interpret the dynamics of the system in this region and prove that the existence of bifurcation for of this second epidemic threshold crucially depends on the absence of awareness decay. We show that the continuum of equilibria that characterizes the slow die-out dynamics collapses into a unique equilibrium when a constant rate of awareness decay is assumed, no matter how small, and that the resulting bifurcation from the disease-free equilibrium is equivalent to that of standard epidemic models. We illustrate these findings with continuous-time stochastic simulations on regular random networks with different degrees. Finally, the behaviour of solutions with and without decay in awareness is compared around the second epidemic threshold for a small rate of awareness decay

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.unawareness, awareness, type-space, Bayesian games, incomplete information, equilibrium, common prior, agreement, speculative trade, interactive epistemology

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.unawareness; awareness; type-space; Bayesian games; incomplete information; equilibrium; common prior; agreement; speculative trade; interactive epistemology

Extensive Games with Possibly Unaware Players

Standard game theory assumes that the structure of the game is common knowledge among players. We relax this assumption by considering extensive games where agents may be unaware of the complete structure of the game. In particular, they may not be aware of moves that they and other agents can make. We show how such games can be represented; the key idea is to describe the game from the point of view of every agent at every node of the game tree. We provide a generalization of Nash equilibrium and show that every game with awareness has a generalized Nash equilibrium. Finally, we extend these results to games with awareness of unawareness, where a player i may be aware that a player j can make moves that i is not aware of, and to subjective games, where payers may have no common knowledge regarding the actual game and their beliefs are incompatible with a common prior.Comment: 45 pages, 3 figures, a preliminary version was presented at AAMAS0

Can education be good for both growth and the environment?

We develop an overlapping generations model of growth and the environment with public policy on education. Beyond the traditional mechanisms through which knowledge, growth and the environment interplay, we stress out the role played by education on environmental awareness. Assuming first that environmental awareness is constant, we show the existence of a balanced growth path along which environmental quality increases continually. Then, if education enhances environmental awareness, the equilibrium properties are modi?ed: the economy can reach a steady state or converge to an asymptotic balanced growth path. Therefore, education does not necessarily promote sustained and sustainable growth.overlapping generations, public education, environmental maintenance, green awareness, sustainable growth

Awareness and AIDS: A Political Economy Model

We present a simple political economy model that explains two major puzzles of government policies to combat HIV/AIDS epidemic: the lack of policy response in many countries where the epidemic is massive and the reversal of the downward trend in HIV prevalence in the countries that have adopted early agressive prevention campaigns. The model builds on the assumption that the unaware citizens impose a negative externality on the aware by increasing the risk of contagion. Prevention campaigns raise awareness of the current generation, which then partially transmit this awareness to the next generation, thus creating political support for the next-period awareness campaigns. The economy has two steady-state equilibria: the "good" one (with high awareness and low prevalence) and the "bad" one (low awareness, high prevalence). The "good" equilibrium is fragile, i.e. a sufficiently large exogenous drop in HIV prevalence undermines the next-generation political support for campaigns and makes the economy drift away towards the "bad" equilibrium.HIV/AIDS, voting, overlapping generations, awareness

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

Ecological User Equilibrium in Traffic Management (TM)?

With increasing environmental sustainability awareness significant attention on ecological traffic management (eco-TM) has come into the focus of researchers and practitioners. While different approaches have been applied to reach minimal pollutant production, the classic user equilibrium calculation with the pollutant production as travel costs instead of using travel times remains in the center of attention. However, the validity of such a direct transformation to find a user equilibrium is questionable. In this paper, a simplified analytical approach to examine the above aforementioned validity has been carried out, followed by a simulation approach to verify the results of the analytical approach. The result shows that the pollutant production function violates the usual assumption of a monotonous function (typically, emission has a minimum at travel speeds around 60 km/h). It also indicates that the respective algorithms to compute the user equilibrium must deal with the fact, that the equilibrium solution is not unique and is dependent on the initial solution. This means that substantial modifications to the algorithms that compute the user equilibrium have to be discussed since they do not work as intended when pollutant production is used as travel costs, especially in a transportation system with mixed speeds that cover a range around the minimum emission speed