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Contradicting Beliefs and Communication

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  • Jean-Marc Tallon

    ()

  • Jean-Christophe Vergnaud

    ()

  • Shmuel Zamir

    ()

Abstract

We address the issue of the representation as well as the evolution of (possibly) mistaken beliefs. We develop a formal setup (a mutual belief space) in which agents might have a mistaken view of what the model is. We then model a communication process, by which agents communicate their beliefs to one another. We define a revision rule that can be applied even when agents have contradictory beliefs. We study its properties and, in particular, show that, when mistaken, agents do not necessarily eventually agree after communicating their beliefs. We finally address the dynamics of revision and show that when beliefs are mistaken, the order of communication may affect the resulting belief structure.

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Bibliographic Info

Paper provided by The Center for the Study of Rationality, Hebrew University, Jerusalem in its series Discussion Paper Series with number dp311.

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Length: 35 pages
Date of creation: Jan 2003
Date of revision:
Handle: RePEc:huj:dispap:dp311

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  1. Paul Milgrom & Nancy L.Stokey, 1979. "Information, Trade, and Common Knowledge," Discussion Papers 377R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. Rubinstein, Ariel, 1989. "The Electronic Mail Game: Strategic Behavior under "Almost Common Knowledge."," American Economic Review, American Economic Association, vol. 79(3), pages 385-91, June.
  3. Klaus Nehring & Giacomo Bonanno, 2003. "Assessing The Truth Axiom Under Incomplete Information," Working Papers 973, University of California, Davis, Department of Economics.
  4. Bacharach, Michael, 1985. "Some extensions of a claim of Aumann in an axiomatic model of knowledge," Journal of Economic Theory, Elsevier, vol. 37(1), pages 167-190, October.
  5. Morris, Stephen, 1994. "Trade with Heterogeneous Prior Beliefs and Asymmetric Information," Econometrica, Econometric Society, vol. 62(6), pages 1327-47, November.
  6. Gul, Faruk & Lundholm, Russell, 1995. "Endogenous Timing and the Clustering of Agents' Decisions," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1039-66, October.
  7. Geanakoplos, John, 1994. "Common knowledge," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 40, pages 1437-1496 Elsevier.
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