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Self-Consistency and Common Prior in Non-Partitional Knowledge Models

Author

Listed:
  • Luciana C. Fiorini
  • José A. Rodrigues-Neto

Abstract

In non-partitional models of knowledge with objective and subjective state spaces, the issue of self-consistency arises. The present paper de?nes a multigraph Gj for each player j, and also a global multigraph G. The posteriors of player j are self-consistent if and only if all cycle equations associated with cycles in Gj are satis?ed. Similarly, the posteriors of all players are consistent with a common prior when all cycle equations corresponding to the cycles in G are satis?ed. In particular, the self-consistency of player j is automatic when Gj is acyclic. Consistency always holds when G is acyclic, regardless of any probabilistic information. There is a simple formula to check for the acyclicity of Gj , and another formula to check for the acyclicity of G.

Suggested Citation

  • Luciana C. Fiorini & José A. Rodrigues-Neto, 2014. "Self-Consistency and Common Prior in Non-Partitional Knowledge Models," ANU Working Papers in Economics and Econometrics 2014-621, Australian National University, College of Business and Economics, School of Economics.
  • Handle: RePEc:acb:cbeeco:2014-621
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp621.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    consistency; correspondence; cycle; knowledge; partition; prior; posterior;

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • 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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