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Iterated Expectations, Compact Spaces, and Common Priors

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Author Info
Ziv Hellman
Abstract

Extending to infinite state spaces that are compact metric spaces a result previously attained by D. Samet solely in the context of finite state spaces, a necessary and suficient condition for the existence of a common prior for several players is given in terms of the players' present beliefs only. A common prior exists if and only if for each random variable it is common knowledge that all Cesaro means of iterated expectations with respect to any permutation converge to the same value; this value is its expectation with respect to the common prior. It is further shown that compactness is a necessary condition for some of the results.

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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 dp522.

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Length: 16 pages
Date of creation: Oct 2009
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Handle: RePEc:huj:dispap:dp522

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  1. Nehring, Klaus, 2004. "The veil of public ignorance," Journal of Economic Theory, Elsevier, vol. 119(2), pages 247-270, December. [Downloadable!] (restricted)
  2. Milgrom, Paul & Stokey, Nancy, 1982. "Information, trade and common knowledge," Journal of Economic Theory, Elsevier, vol. 26(1), pages 17-27, February. [Downloadable!] (restricted)
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  3. Samet, Dov, 1998. "Common Priors and Separation of Convex Sets," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 172-174, July. [Downloadable!] (restricted)
  4. Samet, Dov, 1998. "Iterated Expectations and Common Priors," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 131-141, July. [Downloadable!] (restricted)
  5. Morris, Stephen, 1994. "Trade with Heterogeneous Prior Beliefs and Asymmetric Information," Econometrica, Econometric Society, vol. 62(6), pages 1327-47, November. [Downloadable!] (restricted)
  6. Heifetz, Aviad, 2006. "The positive foundation of the common prior assumption," Games and Economic Behavior, Elsevier, vol. 56(1), pages 105-120, July. [Downloadable!] (restricted)
  7. Robert J. Aumann, 1998. "Common Priors: A Reply to Gul," Econometrica, Econometric Society, vol. 66(4), pages 929-938, July.
  8. Samet, Dov, 2000. "Quantified Beliefs and Believed Quantities," Journal of Economic Theory, Elsevier, vol. 95(2), pages 169-185, December. [Downloadable!] (restricted)
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