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Information at equilibrium

Author

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  • E. Minelli
  • H. Polemarchakis

Abstract

In a game with rational expectations, individuals simultaneously refine their information with the information revealed by the strategies of other individuals. At a Nash equilibrium of a game with rational expectations, the information of individuals is essentially symmetric: the same profile of strategies is also an equilibrium of a game with symmetric information; and strategies are common knowledge. If each player has a veto act, which yields a minimum payoff that no other profile of strategies attains, then the veto profile is the only Nash equilibrium, and it is is an equilibrium with rational expectations and essentially symmetric information; which accounts for the impossibility of speculation. Copyright Springer-Verlag Berlin Heidelberg 2003

Suggested Citation

  • E. Minelli & H. Polemarchakis, 2003. "Information at equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(2), pages 573-584, March.
    • Handle: RePEc:spr:joecth:v:21:y:2003:i:2:p:573-584
    DOI: 10.1007/s00199-002-0260-4
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    Cited by:

    1. Dominik Grafenhofer & Wolfgang Kuhle, 2022. "Observing actions in global games," SN Business & Economics, Springer, vol. 2(12), pages 1-15, December.
    2. Wolfgang Kuhle, 2013. "A Global Game with Heterogenous Priors," Papers 1312.7860, arXiv.org.
    3. Dominik Grafenhofer & Wolfgang Kuhle, 2015. "Observing Each Other's Observations in a Bayesian Coordination Game," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2015_18, Max Planck Institute for Research on Collective Goods.
    4. Dominik Grafenhofer & Wolfgang Kuhle, 2019. "Observing Actions in Bayesian Games," Papers 1904.10744, arXiv.org.
    5. Dominik Grafenhofer & Wolfgang Kuhle, 2021. "Observing Actions in Global Games," Papers 2111.10554, arXiv.org.
    6. Dominik Grafenhofer & Wolgang Kuhle, 2014. "Observing Each Other's Observations in the Electronic Mail Game," Papers 1501.00882, arXiv.org.
    7. Grafenhofer, Dominik & Kuhle, Wolfgang, 2016. "Observing each other’s observations in a Bayesian coordination game," Journal of Mathematical Economics, Elsevier, vol. 67(C), pages 10-17.
    8. Koh, Paul S., 2023. "Stable outcomes and information in games: An empirical framework," Journal of Econometrics, Elsevier, vol. 237(1).

    More about this item

    Keywords

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    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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