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Dynamic Consistency in Incomplete Information Games with Multiple Priors

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  • Pahlke, Marieke

    (Center for Mathematical Economics, Bielefeld University)

Abstract

This paper generalizes the concept of Sequential Equilibrium to allow for ambiguous incomplete information about types or states. We characterize conditions that ensure existence of Sequential Equilibria under ambiguous incomplete information. Under these conditions players form subjective prior belief sets that satisfy a rectangularity condition which leads to dynamically consistent behavior. Furthermore, we give an example which shows that ambiguity can introduce new Sequential Equilibria.

Suggested Citation

  • Pahlke, Marieke, 2018. "Dynamic Consistency in Incomplete Information Games with Multiple Priors," Center for Mathematical Economics Working Papers 599, Center for Mathematical Economics, Bielefeld University.
    • Handle: RePEc:bie:wpaper:599
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    File URL: https://pub.uni-bielefeld.de/download/2930492/2930576
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    References listed on IDEAS

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    Cited by:

    1. Xiaoyu Cheng, 2020. "Ambiguous Persuasion: An Ex-Ante Formulation," Papers 2010.05376, arXiv.org, revised Nov 2023.
    2. Pahlke, Marieke, 2019. "A Note on Dynamic Consistency in Ambiguous Persuasion," Center for Mathematical Economics Working Papers 611, Center for Mathematical Economics, Bielefeld University.
    3. Eran Hanany & Peter Klibanoff & Sujoy Mukerji, 2020. "Incomplete Information Games with Ambiguity Averse Players," American Economic Journal: Microeconomics, American Economic Association, vol. 12(2), pages 135-187, May.
    4. Auster, Sarah & Kellner, Christian, 2022. "Robust bidding and revenue in descending price auctions," Journal of Economic Theory, Elsevier, vol. 199(C).

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    Keywords

    sequential equilibrium; ambiguity; dynamic consistency; multiple priors; imprecise information;
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