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Iterated Expectations with Common Beliefs

Author

Listed:
  • Alfredo Di Tillio

    (University of Pennsylvania)

Abstract

This paper generalizes a result by Samet concerning iterated expecta- tions and common priors. When a player in some state of the world is allowed to ascribe probability zero to that state, something not allowed in Samet s framework, iterated expectations may not converge, and when they do, common knowledge of their limit may not characterize a common prior. It is shown here that replacing common knowledge with common belief, convergence is still lost in general, but when it obtains, the full characterization is restored.

Suggested Citation

  • Alfredo Di Tillio, 2002. "Iterated Expectations with Common Beliefs," Game Theory and Information 0209004, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpga:0209004
    Note: Type of Document - PDF; prepared on LaTeX; to print on Postscript; pages: 5; figures: included/request from author/draw your own
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/game/papers/0209/0209004.pdf
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    References listed on IDEAS

    as
    1. Monderer, Dov & Samet, Dov, 1989. "Approximating common knowledge with common beliefs," Games and Economic Behavior, Elsevier, vol. 1(2), pages 170-190, June.
    2. Samet, Dov, 1998. "Iterated Expectations and Common Priors," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 131-141, July.
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    Cited by:

    1. Rodrigues-Neto, José Alvaro, 2012. "The cycles approach," Journal of Mathematical Economics, Elsevier, vol. 48(4), pages 207-211.

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    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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