Towards a Characterization of Rational Expectations
AbstractR. J. Aumann and J. H. Drèze (2008) define a rational expectation of a player i in a game G as the expected payo of some type of i in some belief system for G in which common knowledge of rationality and common priors obtain. Our goal is to characterize the set of rational expectations in terms of the game's payoff matrix. We provide such a characterization for a specific class of strategic games, called semi-elementary, which includes Myerson's "elementary" games.
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Bibliographic InfoPaper provided by The Center for the Study of Rationality, Hebrew University, Jerusalem in its series Discussion Paper Series with number dp475.
Length: 18 pages
Date of creation: Jan 2008
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-21 (All new papers)
- NEP-CBA-2008-04-21 (Central Banking)
- NEP-GTH-2008-04-21 (Game Theory)
- NEP-UPT-2008-04-21 (Utility Models & Prospect Theory)
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- Robert J. Aumann & Jacques H. Dreze, 2008.
"Rational Expectations in Games,"
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- Roger B. Myerson, 1995.
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1133, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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