On the Stability of Equilibria in Incomplete Information Games under Ambiguity
AbstractIn this paper, we look at the (Kajii and Ui) mixed equilibrium notion, which has been recognized by previous literature as a natural solution concept for incomplete information games in which players have multiple priors on the space of payoff relevant states. We investigate the problem of stability of mixed equilibria with respect to perturbations on the sets of multiple priors. We find out that the (Painlevé-Kuratowski) convergence of posteriors ensures that stability holds; whereas, convergence of priors is not enough to obtain stability since it does not always implies convergence of posteriors when we consider updating rules (for multiple priors) based on the classical Bayesian approach.
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Bibliographic InfoPaper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 332.
Date of creation: 13 May 2013
Date of revision:
Incomplete information games; multiple priors; equilibrium stability;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-19 (All new papers)
- NEP-CTA-2013-05-19 (Contract Theory & Applications)
- NEP-GTH-2013-05-19 (Game Theory)
- NEP-HPE-2013-05-19 (History & Philosophy of Economics)
- NEP-MIC-2013-05-19 (Microeconomics)
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