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The Dirty Face Problem with Unawareness

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  • Liu Zhen

    (SUNY at Buffalo)

Abstract

By revisiting the classic dirty-face problem we highlight the notion of `unawareness' (a simpler state space) and compare it with `impreciseness' (a coarser information partition). The outcomes are derived with various information structures. That allows us to 1) demonstrate a model of differing interpretations of public information using asymmetric awareness; 2) compare and contrast the impact of unawareness and impreciseness on learning; 3) analyze the value of awareness and the value of preciseness; and 4) demonstrate the effect of unawareness and impreciseness on information revelation with indirect aggregation.

Suggested Citation

  • Liu Zhen, 2008. "The Dirty Face Problem with Unawareness," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-20, December.
    • Handle: RePEc:bpj:bejtec:v:8:y:2008:i:1:n:28
    DOI: 10.2202/1935-1704.1441
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    References listed on IDEAS

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    Cited by:

    1. Po-Hsuan Lin, 2022. "Cognitive Hierarchies in Multi-Stage Games of Incomplete Information: Theory and Experiment," Papers 2208.11190, arXiv.org, revised Nov 2023.
    2. Nagler, Matthew G. & Kronenberg, Fredi & Kennelly, Edward J. & Jiang, Bei & Ma, Chunhui, 2010. "The use of indicators for unobservable product qualities: inferences based on consumer sorting," MPRA Paper 28409, University Library of Munich, Germany.

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