Quotient Spaces of Boundedly Rational Types
AbstractBy identifying types whose low-order beliefs up to level ℓ i about the state of nature coincide, we obtain quotient type spaces that are typically smaller than the original ones, preserve basic topological properties, and allow standard equilibrium analysis even under bounded reasoning. Our Bayesian Nash (ℓ i; ℓ ii )-equilibria capture players inability to distinguish types belonging to the same equivalence class. The case with uncertainty about the vector of levels (ℓ i; ℓ ii ) is also analyzed. Two examples illustrate the constructions.
Download InfoIf 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.
Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 582.
Date of creation: Sep 2011
Date of revision:
Incomplete-information games; high-order reasoning; type space; quotient space; hierarchies of beliefs; bounded rationality;
Other versions of this item:
- Davide Cianciaruso & Fabrizio Germano, 2011. "Quotient spaces of boundedly rational types," Economics Working Papers 1287, Department of Economics and Business, Universitat Pompeu Fabra.
- Davide Cianciaruso & Fabrizio Germano, 2011. "Quotient Spaces of Boundedly Rational Types," Discussion Papers 1539, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-15 (All new papers)
- NEP-GTH-2012-05-15 (Game Theory)
- NEP-MIC-2012-05-15 (Microeconomics)
- NEP-UPT-2012-05-15 (Utility Models & Prospect Theory)
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.:
- Muhamet Yildiz & Jonathan Weinsten, 2004.
"Impact of higher-order uncertainty,"
Econometric Society 2004 North American Winter Meetings
157, Econometric Society.
- Philippe Jehiel & Frédéric Koessler, 2006.
"Revisiting Games of Incomplete Information with Analogy-Based Expectations,"
122247000000000252, UCLA Department of Economics.
- Jehiel, Philippe & Koessler, Frédéric, 2008. "Revisiting games of incomplete information with analogy-based expectations," Games and Economic Behavior, Elsevier, vol. 62(2), pages 533-557, March.
- Philippe Jehiel & Frederic Koessler, 2005. "Revisiting Games of Incomplete Information with Analogy-Based Expectations," THEMA Working Papers 2005-04, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Dekel, Eddie & Fudenberg, Drew & Morris, Stephen, 2007.
"Interim correlated rationalizability,"
Econometric Society, vol. 2(1), pages 15-40, March.
- Morris, Stephen & Dekel, Eddie & Fudenberg, Drew, 2007. "Interim Correlated Rationalizability," Scholarly Articles 3196333, Harvard University Department of Economics.
- Eddie Dekel & Drew Fudenberg & Stephen Morris, 2006. "Interim Correlated Rationalizability," Levine's Bibliography 122247000000001188, UCLA Department of Economics.
- Camille Cornand & Frank Heinemann, 2010. "Measuring Agents' Reaction to Private and Public Information in Games with Strategic Complementarities," CESifo Working Paper Series 2947, CESifo Group Munich.
- Uwe Dulleck, 2002.
"The e-mail game revisited - Modeling rough inductive reasoning,"
Vienna Economics Papers
0211, University of Vienna, Department of Economics.
- Uwe Dulleck, 2007. "The E-Mail Game Revisited — Modeling Rough Inductive Reasoning," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 323-339.
- Tyran, Jean-Robert, 2003. "Behavioral Game Theory. Experiments in Strategic Interaction: Colin F. Camerer, Princeton University Press, Princeton, New Jersey, 2003, p. 550, Price $65.00/[UK pound]42.95, ISBN 0-691-09039-4," The Journal of Socio-Economics, Elsevier, vol. 32(6), pages 717-720, December.
- Tomasz Strzalecki, 2010. "Depth of Reasoning and Higher Order Beliefs," Working Paper 8334, Harvard University OpenScholar.
- Willemien Kets, 2012. "Bounded Reasoning and Higher-Order Uncertainty," Discussion Papers 1547, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Colin F. Camerer & Teck-Hua Ho & Juin-Kuan Chong, 2004. "A Cognitive Hierarchy Model of Games," The Quarterly Journal of Economics, MIT Press, vol. 119(3), pages 861-898, August.
- Jonathan Weinstein & Muhamet Yildiz, 2007. "A Structure Theorem for Rationalizability with Application to Robust Predictions of Refinements," Econometrica, Econometric Society, vol. 75(2), pages 365-400, 03.
- Stahl, Dale II & Wilson, Paul W., 1994. "Experimental evidence on players' models of other players," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 309-327, December.
- Ronald Fagin & Joseph Y. Halpern & Yoram Moses & Moshe Y. Vardi, 2003. "Reasoning About Knowledge," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262562006, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruno Guallar).
If references are entirely missing, you can add them using this form.