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

Inductive reasoning about unawareness

Contents:

Author Info

  • Simon Grant

    ()

  • John Quiggin

    ()

Abstract

We develop a model of games with awareness that allows for differential levels of awareness. We show that, for the standard modal-logical interpretations of belief and awareness, a player cannot believe there exist propositions of which he is unaware. Nevertheless, we argue that a boundedly rational individual may regard the possibility that there exist propositions of which she is unaware as being supported by inductive reasoning, based on past experience and consideration of the limited awareness of others. In this paper, we provide a formal representation of inductive reasoning in the context of a dynamic game with differential awareness. We show that, given differential awareness over time and between players, individuals can derive inductive support for propositions expressing their own unawareness. We consider the ecological rationality of heuristics to guide decisions in problems involving differential awareness. Copyright Springer-Verlag Berlin Heidelberg 2013

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://hdl.handle.net/10.1007/s00199-012-0734-y
Download Restriction: Access to full text is restricted to subscribers.

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 Springer in its journal Economic Theory.

Volume (Year): 54 (2013)
Issue (Month): 3 (November)
Pages: 717-755

as in new window
Handle: RePEc:spr:joecth:v:54:y:2013:i:3:p:717-755

Contact details of provider:
Web page: http://link.springer.de/link/service/journals/00199/index.htm

Order Information:
Web: http://link.springer.de/orders.htm

Related research

Keywords: Unawareness; Bounded rationality; Induction; D80; D82;

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. Simon Grant & John Quiggin, 2005. "Learning and Discovery," Risk & Uncertainty Working Papers WP7R05, Risk and Sustainable Management Group, University of Queensland.
  2. Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C, 2009. "Dynamic Unawareness and Rationalizable Behavior," MPRA Paper 15058, University Library of Munich, Germany.
  3. Gollier, Christian & Jullien, Bruno & Treich, Nicolas, 2000. "Scientific progress and irreversibility: an economic interpretation of the 'Precautionary Principle'," Journal of Public Economics, Elsevier, vol. 75(2), pages 229-253, February.
  4. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
  5. Grant, Simon & Quiggin, John, 2008. "Bounded Rationality and Small Worlds," Risk and Sustainable Management Group Working Papers, University of Queensland, School of Economics 151187, University of Queensland, School of Economics.
  6. Modica, Salvatore & Rustichini, Aldo, 1999. "Unawareness and Partitional Information Structures," Games and Economic Behavior, Elsevier, vol. 27(2), pages 265-298, May.
  7. HEIFETZ, Aviad & MEIER, Martin & SCHIPPER, Burkhard C., 2004. "Interactive unawareness," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2004059, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Halpern, Joseph Y. & Rego, Leandro Chaves, 2008. "Interactive unawareness revisited," Games and Economic Behavior, Elsevier, vol. 62(1), pages 232-262, January.
  9. Grant, Simon & Quiggin, John, 2013. "Bounded awareness, heuristics and the Precautionary Principle," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 17-31.
  10. Halpern, Joseph Y. & Rêgo, Leandro C., 2009. "Reasoning about knowledge of unawareness," Games and Economic Behavior, Elsevier, vol. 67(2), pages 503-525, November.
  11. repec:ecl:ucdeco:09-10 is not listed on IDEAS
  12. Spyros Galanis, 2011. "Syntactic foundations for unawareness of theorems," Theory and Decision, Springer, vol. 71(4), pages 593-614, October.
  13. Leandro Rêgo & Joseph Halpern, 2012. "Generalized solution concepts in games with possibly unaware players," International Journal of Game Theory, Springer, Springer, vol. 41(1), pages 131-155, February.
  14. Eddie Dekel & Barton L. Lipman & Aldo Rustichini, 1998. "Standard State-Space Models Preclude Unawareness," Econometrica, Econometric Society, Econometric Society, vol. 66(1), pages 159-174, January.
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:
  1. Feinberg, Yossi, 2012. "Games with Unawareness," Research Papers 2122, Stanford University, Graduate School of Business.
  2. Burkhard Schipper & Hee Yeul Woo, 2014. "Political Awareness, Microtargeting of Voters, and Negative Electoral Campaigning," Working Papers 148, University of California, Davis, Department of Economics.
  3. Edi Karni & Marie-Louise Vier?, 2013. ""Reverse Bayesianism": A Choice-Based Theory of Growing Awareness," American Economic Review, American Economic Association, vol. 103(7), pages 2790-2810, December.
  4. Edi Karni & Marie-Louise Vierø, 2014. "Awareness of Unawareness: A Theory of Decision Making in the Face of Ignorance," Working Papers, Queen's University, Department of Economics 1322, Queen's University, Department of Economics.
  5. Burkhard Schipper, 2013. "Awareness-dependent subjective expected utility," International Journal of Game Theory, Springer, Springer, vol. 42(3), pages 725-753, August.
  6. Grant, Simon & Quiggin, John, 2012. "Bounded Awareness, Heuristics and the Precautionary Principle," Risk and Sustainable Management Group Working Papers, University of Queensland, School of Economics 151203, University of Queensland, School of Economics.
  7. Martin Meier & Burkhard Schipper, 2014. "Bayesian games with unawareness and unawareness perfection," Economic Theory, Springer, Springer, vol. 56(2), pages 219-249, June.
  8. Burkhard Schipper, 2014. "Unawareness - A Gentle Introduction to both the Literature and the Special Issue," Working Papers 145, University of California, Davis, Department of Economics.
  9. Grant, Simon & Kline, Jeff & Quiggin, John, 2012. "Differential awareness, ambiguity, and incomplete contracts: a model of contractual disputes," Risk and Sustainable Management Group Working Papers, University of Queensland, School of Economics 151200, University of Queensland, School of Economics.
  10. Quiggin, John, 2013. "The value of information and the value of awareness," Risk and Sustainable Management Group Working Papers, University of Queensland, School of Economics 151207, University of Queensland, School of Economics.
  11. Oliver Walker, 2011. "Unawareness with ‘possible’ possible worlds," Grantham Research Institute on Climate Change and the Environment Working Papers, Grantham Research Institute on Climate Change and the Environment 69, Grantham Research Institute on Climate Change and the Environment.
  12. Burkhard Schipper & Hee Yeul Woo, 2012. "Political Awareness and Microtargeting of Voters in Electoral Competition," Working Papers 124, University of California, Davis, Department of Economics.
  13. Heinsalu, Sander, 2014. "Universal type structures with unawareness," Games and Economic Behavior, Elsevier, vol. 83(C), pages 255-266.
  14. Schipper, Burkhard C, 2011. "Preference-Based Unawareness," MPRA Paper 30221, University Library of Munich, Germany.

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:spr:joecth:v:54:y:2013:i:3:p:717-755. 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: (Guenther Eichhorn) or (Christopher F Baum).

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.