Weakly rational expectations
Aumann and Drèze (2008) characterised the set of interim expected payoffs that players may have in rational belief systems, in which there is common knowledge of rationality and a common prior. We show here that common knowledge of rationality is not needed: when rationality is satisfied in the support of an action-consistent distribution (a concept introduced by Barelli (2009)), one obtains exactly the same set of rational expectations, despite the fact that in such ‘weakly rational belief systems’ there may not be mutual knowledge of rationality, let alone common knowledge of rationality. In the special case of two-player zero-sum games, the only expected payoff is the minmax value, even under these weak assumptions.
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Volume (Year): 49 (2013)
Issue (Month): 6 ()
Pages: 496-500
| Handle: | RePEc:eee:mateco:v:49:y:2013:i:6:p:496-500 |
| DOI: | 10.1016/j.jmateco.2013.10.001 |
| Contact details of provider: | Web page: http://www.elsevier.com/locate/jmateco
|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Samet, Dov, 1998.
"Common Priors and Separation of Convex Sets,"
Games and Economic Behavior,
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- Robert J. Aumann & Jacques H. Dreze, 2008. "Rational Expectations in Games," American Economic Review, American Economic Association, vol. 98(1), pages 72-86, March.
- AUMANN, Robert J. & DREZE, Jacques H., "undated". "Rational expectations in games," CORE Discussion Papers RP 2011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Feinberg, Yossi, 2000. "Characterizing Common Priors in the Form of Posteriors," Journal of Economic Theory, Elsevier, vol. 91(2), pages 127-179, April.
- Bach, Christian W. & Tsakas, Elias, 2014. "Pairwise epistemic conditions for Nash equilibrium," Games and Economic Behavior, Elsevier, vol. 85(C), pages 48-59. Full references (including those not matched with items on IDEAS)
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