Consensus and common knowledge of an aggregate of decisions
McKelvey and Page [McKelvey, R., Page, T., 1986. Common knowledge, consensus and aggregate information. Econometrica 54, 109-127] generalized Aumann's [Aumann, R.J., 1976. Agreeing to disagree. Ann. Statist. 4, 1236-1239] agreement theorem to the case where agents have common knowledge of a statistic of their posterior probabilities of some event. They showed that if individuals have the same prior, and if the statistic satisfies a stochastic regularity condition, then common knowledge of it implies equality of all posteriors. We show a similar result in a more general setting where agents have common knowledge of a statistic of their individual decisions. Decisions can be posteriors as well as discrete actions such as buy or sell. We show that if the decision rule followed by individuals is balanced union consistent, and if the statistic of individual decisions is exhaustive, then common knowledge of it implies equality of all decisions. We give an example showing that neither Cave's [Cave, J., 1983. Learning to agree. Econ. Letters 12, 147-152] union consistency condition nor Parikh and Krasucki's [Parikh, R., Krasucki, P., 1990. Communication, consensus and knowledge. J. Econ. Theory 52, 178-189] convexity condition is sufficient to guarantee the result.
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- Bergin, James & Brandenburger, Adam, 1990. "A Simple Characterization of Stochastically Monotone Functions," Econometrica, Econometric Society, vol. 58(5), pages 1241-1243, September.
- Lars Tyge Nielsen, 1990.
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CEPR Financial Markets Paper
0003, European Science Foundation Network in Financial Markets, c/o C.E.P.R, 77 Bastwick Street, London EC1V 3PZ..
- Nielsen, Lars Tyge, 1995. "Common Knowledge of a Multivariate Aggregate Statistic," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 207-216, February.
- McKelvey, Richard D & Page, Talbot, 1986. "Common Knowledge, Consensus, and Aggregate Information," Econometrica, Econometric Society, vol. 54(1), pages 109-127, January.
- Parikh, Rohit & Krasucki, Paul, 1990. "Communication, consensus, and knowledge," Journal of Economic Theory, Elsevier, vol. 52(1), pages 178-189, October.
- Nielsen, Lars Tyge, et al, 1990. "Common Knowledge of an Aggregate of Expectations," Econometrica, Econometric Society, vol. 58(5), pages 1235-1239, September.
- Cave, Jonathan A. K., 1983. "Learning to agree," Economics Letters, Elsevier, vol. 12(2), pages 147-152.
- Bacharach, Michael, 1985. "Some extensions of a claim of Aumann in an axiomatic model of knowledge," Journal of Economic Theory, Elsevier, vol. 37(1), pages 167-190, October.
- Geanakoplos, John D. & Polemarchakis, Heraklis M., 1982.
"We can't disagree forever,"
Journal of Economic Theory,
Elsevier, vol. 28(1), pages 192-200, October.
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