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An epistemic analysis of dynamic games with unawareness

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  • Guarino, Pierfrancesco

Abstract

We introduce a novel framework to describe dynamic interactive reasoning in presence of unawareness. We extend the notion of conditional probability systems for this setting and we perform the construction of the corresponding canonical hierarchical structure, that is, the structure that contains all coherent infinite hierarchies of beliefs in presence of unawareness and conditioning events, which is an extension of the one constructed in Battigalli and Siniscalchi (1999a). Relying on the existence of this object, we provide an epistemic characterization of Strong Rationalizability of Pearce (1984) as defined in Heifetz et al. (2013) to address the case of dynamic games with unawareness. The characterization is based on the notion of Strong Belief, introduced in the literature by Battigalli and Siniscalchi (2002).

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  • Guarino, Pierfrancesco, 2020. "An epistemic analysis of dynamic games with unawareness," Games and Economic Behavior, Elsevier, vol. 120(C), pages 257-288.
    • Handle: RePEc:eee:gamebe:v:120:y:2020:i:c:p:257-288
    DOI: 10.1016/j.geb.2019.10.006
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    Cited by:

    1. Schipper, Burkhard C., 2021. "Discovery and equilibrium in games with unawareness," Journal of Economic Theory, Elsevier, vol. 198(C).
    2. Auster, Sarah & Pavoni, Nicola, 2024. "Optimal delegation and information transmission under limited awareness," Theoretical Economics, Econometric Society, vol. 19(1), January.
    3. Martin Meier & Burkhard C. Schipper, 2022. "Conditional dominance in games with unawareness," Working Papers 351, University of California, Davis, Department of Economics.
    4. Evan Piermont & Peio Zuazo-Garin, 2021. "Heterogeneously Perceived Incentives in Dynamic Environments: Rationalization, Robustness and Unique Selections," Papers 2105.06772, arXiv.org.
    5. Gaia Belardinelli & Burkhard C. Schipper, 2023. "Implicit Knowledge in Unawareness Structures," Working Papers 360, University of California, Davis, Department of Economics.
    6. Perea, Andrés, 2022. "Common belief in rationality in games with unawareness," Mathematical Social Sciences, Elsevier, vol. 119(C), pages 11-30.

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    More about this item

    Keywords

    Dynamic exogenous unawareness structure; Conditional probability systems; Canonical hierarchical structure; Dynamic games; Strong rationalizability; Strong belief;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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