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Belief-Free Rationalizability and Informational Robustness

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We propose an incomplete information analogue of rationalizability. An action is said to be belief-free rationalizable if it survives the following iterated deletion process. At each stage, we delete actions for a type of a player that are not a best response to some conjecture that puts weight only on profiles of types of other players and states that that type thinks possible, combined with actions of those types that have survived so far. We describe a number of applications. This solution concept characterizes the implications of equilibrium when a player is known to have some private information but may have additional information. It thus answers the "informational robustness" question of what can we say about the set of outcomes that may arise in equilibrium of a Bayesian game if players may observe some additional information.

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File URL: http://cowles.yale.edu/sites/default/files/files/pub/d20/d2066.pdf
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Paper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 2066.

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Length: 31 pages
Date of creation: Dec 2016
Handle: RePEc:cwl:cwldpp:2066
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Web page: http://cowles.yale.edu/

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Order Information: Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA

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