Almost Common Priors
AbstractWhat happens when priors are not common? We show that for each type proﬁle τ over a knowledge space (Ω, Π), where the state space Ω is connected with respect to the partition proﬁle Π, we can associate a value 0 ≤ ε ≤ 1 that we term the prior distance of τ , where ε = 0 if and only if the proﬁle has a common prior. If τ has ε prior distance, then for any bet f amongst the players, it cannot be common knowledge that each player expects a positive gain of ε‖f‖ ∞ , thus extending no betting results under common priors. Furthermore, as more information is obtained and partitions are reﬁned, the prior distance, and thus the extent of common knowledge disagreement, decreases. %Length: 18 pages %File-URL: http://ratio.huji.ac.il/sites/default/files/publications/dp560.pdf
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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 dp560.
Length: 13 pages
Date of creation: Sep 2010
Date of revision:
Publication status: Forthcoming in International Journal of Game Theory.
Other versions of this item:
- NEP-ALL-2010-10-30 (All new papers)
- NEP-GTH-2010-10-30 (Game Theory)
- NEP-MIC-2010-10-30 (Microeconomics)
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