Common Learning with Intertemporal Dependence
AbstractConsider two agents who learn the value of an unknown parameter by observing a sequence of private signals. Will the agents commonly learn the value of the parameter, i.e., will the true value of the parameter become approximate common-knowledge? If the signals are independent and identically distributed across time (but not necessarily across agents), the answer is yes (Cripps, Ely, Mailath, and Samuelson, 2008). This paper explores the implications of allowing the signals to be dependent over time. We present a counterexample showing that even extremely simple time dependence can preclude common learning, and present sufficient conditions for common learning.
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Bibliographic InfoPaper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 11-012.
Length: 42 pages
Date of creation: 11 May 2011
Date of revision:
Common learning; common belief; private signals; private beliefs;
Other versions of this item:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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- Martin W. Cripps & Jeffrey C. Ely & George J. Mailath & Larry Samuelson, 2006.
Cowles Foundation Discussion Papers
1575R, Cowles Foundation for Research in Economics, Yale University, revised Jun 2007.
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- Martin W. Cripps & Jeffrey C. Ely & George J. Mailath & Larry Samuelson, 2006. "Common Learning," Cowles Foundation Discussion Papers 1575, Cowles Foundation for Research in Economics, Yale University.
- Martin W. Cripps & Jeffrey C. Ely & George J. Mailath & Larry Samuelson, 2006. "Common Learning," Levine's Bibliography 321307000000000355, UCLA Department of Economics.
- Martin W. Cripps & Jeffrey C. Ely & George J. Mailath & Larry Samuelson, 2007. "Common Learning," PIER Working Paper Archive 07-018, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- 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.
- Jakub Steiner & Colin Stewart, 2010.
"Communication, Timing, and Common Learning,"
1484, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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