Advanced Search
MyIDEAS: Login to save this article or follow this journal

Rationalization and Incomplete Information

Contents:

Author Info

  • Battigalli Pierpaolo

    ()
    (Università Bocconi, IEP)

  • Siniscalchi Marciano

    ()
    (Northwestern University and Princeton University)

Abstract

We analyze a family of extensive-form solution procedures for games with incomplete information that do not require the specification of an epistemic type space a la Harsanyi, but can accommodate a (commonly known) collection of explicit restrictions D on first-order beliefs. For any fixed D we obtain a solution called D-rationalizability.In static games, D-rationalizability characterizes the set of outcomes (combinations of payoff types and strategies) that may occur in any Bayesian equilibrium model consistent with D; these are precisely the outcomes consistent with common certainty of rationality and of the restrictions D. Hence, our approach to the analysis of incomplete-information games is consistent with Harsanyi's, and it may be viewed as capturing the robust implications of Bayesian equilibrium analysis.In dynamic games, D-rationalizability yields a forward-induction refinement of this set of Bayesian equilibrium outcomes. Focusing on the restriction that first-order beliefs be consistent with a given distribution on terminal nodes, we obtain a refinement of self-confirming equilibrium. In signalling games, this refinement coincides with the Iterated Intuitive Criterion.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.degruyter.com/view/j/bejte.2003.3.1/bejte.2003.3.1.1073/bejte.2003.3.1.1073.xml?format=INT
Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Theoretical Economics.

Volume (Year): 3 (2003)
Issue (Month): 1 (June)
Pages: 1-46

as in new window
Handle: RePEc:bpj:bejtec:v:advances.3:y:2003:i:1:n:3

Contact details of provider:
Web page: http://www.degruyter.com

Order Information:
Web: http://www.degruyter.com/view/j/bejte

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Paul Milgrom & Robert Weber, 1981. "Distributional Strategies for Games with Incomplete Information," Discussion Papers 428R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. In-Koo Cho & David M. Kreps, 1997. "Signaling Games and Stable Equilibria," Levine's Working Paper Archive 896, David K. Levine.
  3. Sobel, Joel & Stole, Lars & Zapater, Inigo, 1990. "Fixed-equilibrium rationalizability in signaling games," Journal of Economic Theory, Elsevier, vol. 52(2), pages 304-331, December.
  4. J. Watson & P. Battigalli, 2010. "On 'Reputation' Refinements with Heterogeneous Beliefs," Levine's Working Paper Archive 582, David K. Levine.
  5. Fudenberg, D. & Levine, D.K., 1991. "Self-Confirming Equilibrium ," Working papers 581, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Dirk Bergemann & Stephen Morris, 2005. "Robust Mechanism Design," NajEcon Working Paper Reviews 666156000000000593, www.najecon.org.
  7. Morris, Stephen, 1995. "The Common Prior Assumption in Economic Theory," Economics and Philosophy, Cambridge University Press, vol. 11(02), pages 227-253, October.
  8. Dekel, Eddie & Fudenberg, Drew & Levine, David K., 2004. "Learning to play Bayesian games," Games and Economic Behavior, Elsevier, vol. 46(2), pages 282-303, February.
  9. Dekel, E. & Wolinsky, A., 2000. "Rationalizable Outcomes of Large Independent Private-Value First-Price Discrete Auctions," Papers 2000-13, Tel Aviv.
  10. Battigalli, Pierpaolo & Siniscalchi, Marciano, 2002. "Strong Belief and Forward Induction Reasoning," Journal of Economic Theory, Elsevier, vol. 106(2), pages 356-391, October.
  11. Battigalli, Pierpaolo, 1996. "Strategic Rationality Orderings and the Best Rationalization Principle," Games and Economic Behavior, Elsevier, vol. 13(2), pages 178-200, April.
  12. Watson, Joel, 1993. "A "Reputation" Refinement without Equilibrium," Econometrica, Econometric Society, vol. 61(1), pages 199-205, January.
  13. Samet, Dov, 1998. "Iterated Expectations and Common Priors," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 131-141, July.
  14. Rubinstein Ariel & Wolinsky Asher, 1994. "Rationalizable Conjectural Equilibrium: Between Nash and Rationalizability," Games and Economic Behavior, Elsevier, vol. 6(2), pages 299-311, March.
  15. Giacomo Bonanno & Klaus Nehring, 1999. "How to make sense of the common prior assumption under incomplete information," International Journal of Game Theory, Springer, vol. 28(3), pages 409-434.
  16. Eddie Dekel & Drew Fudenberg & David K. Levine, . "Payoff Information and Self-Confirming Equilibrium," ELSE working papers 032, ESRC Centre on Economics Learning and Social Evolution.
  17. Brandenburger Adam & Dekel Eddie, 1993. "Hierarchies of Beliefs and Common Knowledge," Journal of Economic Theory, Elsevier, vol. 59(1), pages 189-198, February.
  18. Kalai, Ehud & Lehrer, Ehud, 1993. "Subjective Equilibrium in Repeated Games," Econometrica, Econometric Society, vol. 61(5), pages 1231-40, September.
  19. Stephen Morris & Skiadas Costis, 1999. "Rationalizable Trade," Cowles Foundation Discussion Papers 1211, Cowles Foundation for Research in Economics, Yale University.
  20. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
  21. Battigalli, Pierpaolo & Siniscalchi, Marciano, 1999. "Hierarchies of Conditional Beliefs and Interactive Epistemology in Dynamic Games," Journal of Economic Theory, Elsevier, vol. 88(1), pages 188-230, September.
  22. Samet, Dov, 1998. "Common Priors and Separation of Convex Sets," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 172-174, July.
  23. Brandenburger, Adam & Dekel, Eddie, 1987. "Rationalizability and Correlated Equilibria," Econometrica, Econometric Society, vol. 55(6), pages 1391-1402, November.
  24. Ben-Porath, Elchanan, 1997. "Rationality, Nash Equilibrium and Backwards Induction in Perfect-Information Games," Review of Economic Studies, Wiley Blackwell, vol. 64(1), pages 23-46, January.
  25. Battigalli, P., 1999. "Rationalizability in Incomplete Information Games," Economics Working Papers eco99/17, European University Institute.
  26. Reny, Philip J, 1992. "Backward Induction, Normal Form Perfection and Explicable Equilibria," Econometrica, Econometric Society, vol. 60(3), pages 627-49, May.
  27. Dekel, Eddie & Wolinsky, Asher, 2003. "Rationalizable outcomes of large private-value first-price discrete auctions," Games and Economic Behavior, Elsevier, vol. 43(2), pages 175-188, May.
  28. Battigalli, Pierpaolo & Siniscalchi, Marciano, 2003. "Rationalizable bidding in first-price auctions," Games and Economic Behavior, Elsevier, vol. 45(1), pages 38-72, October.
  29. Faruk Gul, 1998. "A Comment on Aumann's Bayesian View," Econometrica, Econometric Society, vol. 66(4), pages 923-928, July.
  30. John C Harsanyi, 1997. "Games with incomplete information played by "bayesian" players," Levine's Working Paper Archive 1175, David K. Levine.
  31. Perry, Motty & Reny, Philip J., 1999. "A General Solution to King Solomon's Dilemma," Games and Economic Behavior, Elsevier, vol. 26(2), pages 279-285, January.
  32. Kalai, Ehud & Lehrer, Ehud, 1995. "Subjective games and equilibria," Games and Economic Behavior, Elsevier, vol. 8(1), pages 123-163.
  33. D. B. Bernheim, 2010. "Rationalizable Strategic Behavior," Levine's Working Paper Archive 514, David K. Levine.
  34. FORGES , Françoise, 1993. "Five Legitimate Definitions of Correlated Equilibrium in Games with Incomplete Information," CORE Discussion Papers 1993009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  35. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-50, July.
  36. Feinberg, Yossi, 2000. "Characterizing Common Priors in the Form of Posteriors," Journal of Economic Theory, Elsevier, vol. 91(2), pages 127-179, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bpj:bejtec:v:advances.3:y:2003:i:1:n:3. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.