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A Belief-Based Characterization of Reduced-Form Auctions

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  • Xu Lang

Abstract

We study games of chance (e.g., pokers, dices, horse races) in the form of agents' first-order posterior beliefs about game outcomes. We ask for any profile of agents' posterior beliefs, is there a game that can generate these beliefs? We completely characterize all feasible joint posterior beliefs from these games. The characterization enables us to find a new variant of Border's inequalities (Border, 1991), which we call a belief-based characterization of Border's inequalities. It also leads to a generalization of Aumann's Agreement Theorem. We show that the characterization results are powerful in bounding the correlation of agents' joint posterior beliefs.

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  • Xu Lang, 2023. "A Belief-Based Characterization of Reduced-Form Auctions," Papers 2307.04070, arXiv.org.
    • Handle: RePEc:arx:papers:2307.04070
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    References listed on IDEAS

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