IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Bayesian Games with Unawareness and Unawareness Perfection

  • Martin Meier
  • Burkhard Schipper

    (Department of Economics, University of California Davis)

Applying unawareness belief structures introduced in Heifetz, Meier, and Schipper (2013a), we develop Bayesian games with unawareness, define equilibrium, and prove existence. We show how equilibria are extended naturally from lower to higher awareness levels and restricted from higher to lower awareness levels. We apply Bayesian games with unawareness to investigate the robustness of equilibria to uncertainty about opponents' awareness of actions. We show that a Nash equilibrium of a strategic game is robust to unawareness of actions if and only if it is not weakly dominated. Finally, we discuss the relationship between standard Bayesian games and Bayesian games with unawareness.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://wp.econ.ucdavis.edu/13-9.pdf
Download Restriction: no

Paper provided by University of California, Davis, Department of Economics in its series Working Papers with number 139.

as
in new window

Length: 33
Date of creation: 13 Sep 2013
Date of revision:
Handle: RePEc:cda:wpaper:13-9
Contact details of provider: Postal: One Shields Ave., Davis, CA 95616-8578
Phone: (530) 752-0741
Fax: (530) 752-9382
Web page: http://www.econ.ucdavis.edu
Email:


More information through EDIRC

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.:

as in new window
  1. Dimitri Vayanos & Pierre-Olivier Weill, 2006. "A Search-Based Theory of the On-the-Run Phenomenon," NBER Working Papers 12670, National Bureau of Economic Research, Inc.
  2. Leandro Rêgo & Joseph Halpern, 2012. "Generalized solution concepts in games with possibly unaware players," International Journal of Game Theory, Springer, vol. 41(1), pages 131-155, February.
  3. Arvind Krishnamurthy & Annette Vissing-Jorgensen, 2012. "The Aggregate Demand for Treasury Debt," Journal of Political Economy, University of Chicago Press, vol. 120(2), pages 233 - 267.
  4. Eddie Dekel & Barton L. Lipman & Aldo Rustichini, 1998. "Standard State-Space Models Preclude Unawareness," Econometrica, Econometric Society, vol. 66(1), pages 159-174, January.
  5. Jernej Copic & Andrea Galeotti, 2006. "Awareness as an Equilibrium Notion: Normal-Form Games," Economics Discussion Papers 614, University of Essex, Department of Economics.
  6. Simon Grant & John Quiggin, 2013. "Inductive reasoning about unawareness," Economic Theory, Springer, vol. 54(3), pages 717-755, November.
  7. Guillaume Rocheteau & Randall Wright, 2003. "Money in Search Equilibrium, in Competitive Equilibrium, and in Competitive Search Equilibrium," PIER Working Paper Archive 03-031, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  8. Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2005. "A Canonical Model for Interactive Unawareness," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 60, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  9. Benjamin Lester & Andrew Postlewaite & Randall Wright, 2012. "Information, Liquidity, Asset Prices, and Monetary Policy," Review of Economic Studies, Oxford University Press, vol. 79(3), pages 1209-1238.
  10. Galanis, Spyros, 2007. "Unawareness of theorems," Discussion Paper Series In Economics And Econometrics 51816, Economics Division, School of Social Sciences, University of Southampton.
  11. Mengel Friederike & Tsakas Elias & Vostroknutov Alexander, 2011. "Decision Making with Imperfect Knowledge of the State Space," Research Memorandum 013, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  12. Ricardo Lagos & Guillaume Rocheteau, 2006. "Money and capital as competing media of exchange," Working Paper 0608, Federal Reserve Bank of Cleveland.
  13. Burkhard Schipper, 2013. "Awareness-dependent subjective expected utility," International Journal of Game Theory, Springer, vol. 42(3), pages 725-753, August.
  14. Ricardo Lagos, 2005. "Asset Prices and Liquidity in an Exchange Economy," 2005 Meeting Papers 143, Society for Economic Dynamics.
  15. Aleksander Berentsen & Gabriele Camera, 2004. "Money, Credit, and Banking," 2004 Meeting Papers 473, Society for Economic Dynamics.
  16. Feinberg, Yossi, 2005. "Games with Incomplete Awareness," Research Papers 1894, Stanford University, Graduate School of Business.
  17. Modica, Salvatore & Rustichini, Aldo, 1999. "Unawareness and Partitional Information Structures," Games and Economic Behavior, Elsevier, vol. 27(2), pages 265-298, May.
  18. Refet S. G�rkaynak & Jonathan H. Wright, 2012. "Macroeconomics and the Term Structure," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 331-67, June.
  19. Rocheteau, Guillaume, 2011. "Payments and liquidity under adverse selection," Journal of Monetary Economics, Elsevier, vol. 58(3), pages 191-205.
  20. Ravi Bansal & Amir Yaron, 2004. "Risks for the Long Run: A Potential Resolution of Asset Pricing Puzzles," Journal of Finance, American Finance Association, vol. 59(4), pages 1481-1509, 08.
  21. Harborne W. Stuart Jr. & Hong Hu, 2002. "An epistemic analysis of the Harsanyi transformation," International Journal of Game Theory, Springer, vol. 30(4), pages 517-525.
  22. Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2006. "Interactive unawareness," Journal of Economic Theory, Elsevier, vol. 130(1), pages 78-94, September.
  23. Boel, Paola & Camera, Gabriele, 2006. "Efficient monetary allocations and the illiquidity of bonds," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1693-1715, October.
  24. Salyer, Kevin D, 1990. "The Term Structure and Time Series Properties of Nominal Interest Rates: Implications from Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 22(4), pages 478-90, November.
  25. Athanasios Geromichalos & Juan M Licari & Jose Suarez-Lledo, 2007. "Monetary Policy and Asset Prices," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(4), pages 761-779, October.
  26. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-50, July.
  27. Ina Simonovska & Athanasios Geromichalos, 2011. "Asset Liquidity and International Portfolio Choice," 2011 Meeting Papers 756, Society for Economic Dynamics.
  28. Halpern, Joseph Y. & Rego, Leandro Chaves, 2008. "Interactive unawareness revisited," Games and Economic Behavior, Elsevier, vol. 62(1), pages 232-262, January.
  29. Galanis, Spyros, 2013. "Trade and the value of information under unawareness," Discussion Paper Series In Economics And Econometrics 1313, Economics Division, School of Social Sciences, University of Southampton.
  30. Jacquet, Nicolas L. & Tan, Serene, 2012. "Money and asset prices with uninsurable risks," Journal of Monetary Economics, Elsevier, vol. 59(8), pages 784-797.
  31. Athanasios Geromichalos & Lucas Herrenbrueck, 2012. "Monetary Policy, Asset Prices, and Liquidity in Over-the-Counter Markets," Working Papers 1220, University of California, Davis, Department of Economics.
  32. Aleksander Berentsen & Samuel Huber & Alessandro Marchesiani, 2011. "Free-riding on liquidity," ECON - Working Papers 032, Department of Economics - University of Zurich.
  33. Carsten S. Nielsen & Alexander Sebald, 2010. "Unawareness in Dynamic Psychological Games," Discussion Papers 10-19, University of Copenhagen. Department of Economics, revised Feb 2011.
  34. Heinsalu, Sander, 2014. "Universal type structures with unawareness," Games and Economic Behavior, Elsevier, vol. 83(C), pages 255-266.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cda:wpaper:13-9. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Scott Dyer)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.