Two Characterizations of Consistency
AbstractThis paper offers two characterizations of the Kreps-Wilson concept of consistent beliefs. One is primarily of applied interest: beliefs are consistent iff they can be constructed by multiplying together vectors of monomials which induce the strategies. The other is primarily of conceptual interest: beliefs are consistent iff they can be induced by a "product dispersion" whose marginal dispersions induce the strategies (a "dispersion" is defined as a relative probability system, and a "product" dispersion is defined as a joint dispersion whose marginal dispersions are independent). Both these characterizations are derived with linear algebra.
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Bibliographic InfoPaper provided by University of Western Ontario, Department of Economics in its series UWO Department of Economics Working Papers with number 20052.
Date of creation: 2005
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-22 (All new papers)
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