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Information structures with unawareness


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  • Li, Jing
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I construct a state space model with unawareness following [R.J. Aumann, Agreeing to disagree, Ann. Stat. 76 (1976) 1236-1239]. Dekel et al. [E. Dekel, B.L. Lipman, A. Rustichini, Standard state-space models preclude unawareness, Econometrica 66 (1998) 159-173] show that standard state space models are incapable of representing unawareness. The model circumvents the impossibility result by endowing the agent with a subjective state space that differs from the full state space when he has the unawareness problem. Information is modeled as a pair, consisting of both factual information and awareness information. The model preserves the central properties of the standard information partition model.

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 144 (2009)
Issue (Month): 3 (May)
Pages: 977-993

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Handle: RePEc:eee:jetheo:v:144:y:2009:i:3:p:977-993

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Keywords: Unawareness Information Information partition State space models;


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