Characterizing Consistency by Monomials and by Product Dispersions
AbstractThis paper derives two characterizations of the Kreps-Wilson concept of consistent beliefs. In the first, beliefs are shown to be consistent iff they can be constructed from the elements of monomial vectors which converge to the strategies. In the second, beliefs are shown to be consistent iff they can be induced by a product dispersion whose marginal dispersions induce the strategies. The first characterization is simpler than the definition in Kreps and Wilson (1982), and the second seems more fundamental in the sense that it is built on an underlying theory of relative probability.
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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 20062.
Date of creation: 2006
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-12 (All new papers)
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- Kreps, David M & Wilson, Robert, 1982.
Econometric Society, vol. 50(4), pages 863-94, July.
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- Peter A. Streufert, 2005. "Two Characterizations of Consistency," UWO Department of Economics Working Papers 20052, University of Western Ontario, Department of Economics.
- Fudenberg, Drew & Tirole, Jean, 1991. "Perfect Bayesian equilibrium and sequential equilibrium," Journal of Economic Theory, Elsevier, vol. 53(2), pages 236-260, April.
- Kohlberg, Elon & Reny, Philip J., 1997. "Independence on Relative Probability Spaces and Consistent Assessments in Game Trees," Journal of Economic Theory, Elsevier, vol. 75(2), pages 280-313, August.
- Peter A. Streufert, 2006. "Products of Several Relative Probabilities," UWO Department of Economics Working Papers 20061, University of Western Ontario, Department of Economics.
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