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The logic of Knightian games

Author

Listed:
  • Shiri Alon

    (Bar Ilan University)

  • Aviad Heifetz

    (The Open University of Israel)

Abstract

We devise a sound and complete epistemic-logic axiomatization for Knightian type spaces—the generalization of Harsanyi type spaces employed in strategic games with asymmetric uncertainty/ambiguity. In a Knightian type space, each type’s epistemic attitude is represented by a set of probability measures. The axiomatization unravels how each such epistemic attitude embodies a (potentially) partial likelihood relation over formulas, and conversely, each partial likelihood relation over formulas is representable by a Knightian type.

Suggested Citation

  • Shiri Alon & Aviad Heifetz, 2014. "The logic of Knightian games," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(2), pages 161-182, October.
    • Handle: RePEc:spr:etbull:v:2:y:2014:i:2:d:10.1007_s40505-014-0037-5
    DOI: 10.1007/s40505-014-0037-5
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    References listed on IDEAS

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    More about this item

    Keywords

    Knightian uncertainty; Type spaces; Epistemic logic; Ambiguity;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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