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Common reasoning in games

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Author Info
Robin P. Cubitt () (School of Economics, University of Nottingham)
Robert Sugden () (School of Economics, University of East Anglia)

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Abstract

This paper makes three related contributions to noncooperative game theory: (i) a solution concept (the “ICEU solution”), which is generated by an iterative procedure that constructs trinary partitions of strategy sets and deals with problems arising from weak dominance; (ii) a class of models of players’ reasoning, inspired by David Lewis’s work on common knowledge, which can together represent common knowledge of rationality for any consistent conception of individual practical rationality; and, using these ingredients, (iii) a diagnosis of paradoxes associated with the concept of common knowledge of rationality, as represented in Bayesian models of games.

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Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2008-01.

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Date of creation: Mar 2008
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Handle: RePEc:cdx:dpaper:2008-01

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C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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This page was last updated on 2008-9-5.

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