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Conservative belief and rationality

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  • Halpern, Joseph Y.
  • Pass, Rafael

Abstract

Playersʼ beliefs may be incompatible, in the sense that player i can assign probability 1 to an event E to which player j assigns probability 0. One way to block incompatibility is to assume a common prior. We consider here a different approach: we require playersʼ beliefs to be conservative, in the sense that all players must ascribe the actual world positive probability. We show that common conservative belief of rationality (CCBR) characterizes strategies in the support of a subjective correlated equilibrium where all playersʼ beliefs have common support. We also define a notion of strong rationalizability, and show that it is characterized by CCBR.

Suggested Citation

  • Halpern, Joseph Y. & Pass, Rafael, 2013. "Conservative belief and rationality," Games and Economic Behavior, Elsevier, vol. 80(C), pages 186-192.
    • Handle: RePEc:eee:gamebe:v:80:y:2013:i:c:p:186-192
    DOI: 10.1016/j.geb.2013.03.004
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    Cited by:

    1. Bjorndahl, A. & Halpern, J.Y. & Pass, R., 2017. "Reasoning about rationality," Games and Economic Behavior, Elsevier, vol. 104(C), pages 146-164.

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    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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