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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Paper provided by Center for Rationality and Interactive Decision Theory, Hebrew University, Jerusalem in its series Discussion Paper Series with number
dp311.
References listed on IDEAS 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.:
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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