Information structures with unawareness
I construct a state space model with unawareness following [R.J. Aumann, Agreeing to disagree, Ann. Stat. 76 (1976) 1236-1239]. Dekel et al. [E. Dekel, B.L. Lipman, A. Rustichini, Standard state-space models preclude unawareness, Econometrica 66 (1998) 159-173] show that standard state space models are incapable of representing unawareness. The model circumvents the impossibility result by endowing the agent with a subjective state space that differs from the full state space when he has the unawareness problem. Information is modeled as a pair, consisting of both factual information and awareness information. The model preserves the central properties of the standard information partition model.
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- Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2006.
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- Jing Li, 2008. "Modeling Unawareness in Arbitrary State Spaces," PIER Working Paper Archive 08-021, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Eddie Dekel & Barton L. Lipman & Aldo Rustichini, 1998. "Standard State-Space Models Preclude Unawareness," Econometrica, Econometric Society, vol. 66(1), pages 159-174, January.
- Jing Li, 2008. "Interactive Knowledge with Unawareness," PIER Working Paper Archive 08-023, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
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