IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

A Unified Approach to Information, Knowledge, and Stability

  • Xiao Luo
  • Yi-Chun Chen

Within the context of strategic interaction, we provide a unified framework for analyzing information, knowledge, and the "stable" pattern of behavior. We first study the related interactive epistemology and, in particular, show an equivalence theorem between a strictly dominated strategy and a never-best reply in terms of epistemic states. We then explore epistemic foundations behind the fascinating idea of stability due to J. von Neumann and O. Morgenstern. The major features of our approach are: (i)unlike the ad hoc semantic model of knowledge, the state space is constructed by Harsanyi’s types that are explicitly formulated by Epstein and Wang (Econometrica 64, 1996, 1343-1373); (ii)players may have general preferences, including subjective expected utility and non-expected utility; and (iii) players may be boundedly rational and have non-partitional information structures

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:
Download Restriction: no

Paper provided by Econometric Society in its series Econometric Society 2004 Far Eastern Meetings with number 472.

in new window

Date of creation: 11 Aug 2004
Date of revision:
Handle: RePEc:ecm:feam04:472
Contact details of provider: Phone: 1 212 998 3820
Fax: 1 212 995 4487
Web page:

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. GHIRARDATO, Paolo & LE BRETON, Michel, . "Choquet rationality," CORE Discussion Papers RP 1447, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Machina,Mark & Schmeidler,David, 1991. "A more robust definition of subjective probability," Discussion Paper Serie A 365, University of Bonn, Germany.
  3. Kin Chung Lo, 1995. "Extensive Form Games with Uncertainty Averse Players," Working Papers ecpap-95-03, University of Toronto, Department of Economics.
  4. Aviad Heifetz & Dov Samet, 1996. "Topology-Free Typology of Beliefs," Game Theory and Information 9609002, EconWPA, revised 17 Sep 1996.
  5. Adam Brandenburger & Eddie Dekel, 2014. "Rationalizability and Correlated Equilibria," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 3, pages 43-57 World Scientific Publishing Co. Pte. Ltd..
  6. Werlang, Sérgio Ribeiro da Costa & Chin-Chiu Tan, Tommy, 1987. "The Bayesian Foundations of solution concepts of games," Economics Working Papers (Ensaios Economicos da EPGE) 111, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  7. Lucas, William F., 1992. "Von Neumann-Morgenstern stable sets," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 17, pages 543-590 Elsevier.
  8. Aumann, Robert & Brandenburger, Adam, 1995. "Epistemic Conditions for Nash Equilibrium," Econometrica, Econometric Society, vol. 63(5), pages 1161-80, September.
  9. Epstein, Larry G & Wang, Tan, 1996. ""Beliefs about Beliefs" without Probabilities," Econometrica, Econometric Society, vol. 64(6), pages 1343-73, November.
  10. Harsanyi, John C, 1995. "Games with Incomplete Information," American Economic Review, American Economic Association, vol. 85(3), pages 291-303, June.
  11. R. Aumann, 2010. "Correlated Equilibrium as an expression of Bayesian Rationality," Levine's Bibliography 513, UCLA Department of Economics.
  12. Harsanyi, J.C., 1992. "Utilities, Preferences and Substantive Goods," Research Paper 101, World Institute for Development Economics Research.
  13. Schmeidler, David, 1989. "Subjective Probability and Expected Utility without Additivity," Econometrica, Econometric Society, vol. 57(3), pages 571-87, May.
  14. Geanakoplos & Adam Brandenburger & Eddie Dekel, 1988. "Correlated Equilibrium with Generalized Information Structures," Cowles Foundation Discussion Papers 884R, Cowles Foundation for Research in Economics, Yale University, revised Aug 1989.
  15. Samuelson, L., 1989. "Dominated Strategies And Common Knowledge," Papers 1-89-3, Pennsylvania State - Department of Economics.
  16. Marinacci, Massimo, 2000. "Ambiguous Games," Games and Economic Behavior, Elsevier, vol. 31(2), pages 191-219, May.
  17. D. B. Bernheim, 2010. "Rationalizable Strategic Behavior," Levine's Working Paper Archive 661465000000000381, David K. Levine.
  18. Chwe Michael Suk-Young, 1994. "Farsighted Coalitional Stability," Journal of Economic Theory, Elsevier, vol. 63(2), pages 299-325, August.
  19. Geanakoplos, John, 1994. "Common knowledge," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 40, pages 1437-1496 Elsevier.
  20. Epstein, Larry G., 1997. "Preference, Rationalizability and Equilibrium," Journal of Economic Theory, Elsevier, vol. 73(1), pages 1-29, March.
  21. Nakanishi, Noritsugu, 1999. "Reexamination of the International Export Quota Game through the Theory of Social Situations," Games and Economic Behavior, Elsevier, vol. 27(1), pages 132-152, April.
  22. Basu, K. & Weibull, J., 1990. "Strategy Subsets Closed Under Rational Behavior," Papers 62, Princeton, Woodrow Wilson School - Discussion Paper.
  23. John Geanakoplos & (**), Moshe Y. Vardi & Joseph Y. Halpern & Ronald Fagin, 1999. "The hierarchical approach to modeling knowledge and common knowledge," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(3), pages 331-365.
  24. Reny, Philip J. & Robson, Arthur J., 2004. "Reinterpreting mixed strategy equilibria: a unification of the classical and Bayesian views," Games and Economic Behavior, Elsevier, vol. 48(2), pages 355-384, August.
  25. Morris, Stephen, 1996. "The Logic of Belief and Belief Change: A Decision Theoretic Approach," Journal of Economic Theory, Elsevier, vol. 69(1), pages 1-23, April.
  26. Borgers, Tilman, 1993. "Pure Strategy Dominance," Econometrica, Econometric Society, vol. 61(2), pages 423-30, March.
  27. Epstein, Larry G., 2000. "Are Probabilities Used in Markets ?," Journal of Economic Theory, Elsevier, vol. 91(1), pages 86-90, March.
  28. Robert J. Aumann, 1999. "Interactive epistemology I: Knowledge," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(3), pages 263-300.
  29. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
  30. Brandenburger Adam & Dekel Eddie, 1993. "Hierarchies of Beliefs and Common Knowledge," Journal of Economic Theory, Elsevier, vol. 59(1), pages 189-198, February.
  31. Vassilakis, Spyros & Zamir, Shmuel, 1993. "Common belief and common knowledge," Journal of Mathematical Economics, Elsevier, vol. 22(5), pages 495-505.
  32. Kin Chung Lo, 1995. "Equilibrium in Beliefs Under Uncertainty," Working Papers ecpap-95-02, University of Toronto, Department of Economics.
  33. Shin Hyun Song, 1993. "Logical Structure of Common Knowledge," Journal of Economic Theory, Elsevier, vol. 60(1), pages 1-13, June.
  34. Aumann, Robert J., 1995. "Backward induction and common knowledge of rationality," Games and Economic Behavior, Elsevier, vol. 8(1), pages 6-19.
  35. Licun Xue, 1998. "Coalitional stability under perfect foresight," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(3), pages 603-627.
  36. Epstein Larry G. & Le Breton Michel, 1993. "Dynamically Consistent Beliefs Must Be Bayesian," Journal of Economic Theory, Elsevier, vol. 61(1), pages 1-22, October.
  37. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-50, July.
  38. Luo, Xiao & Ma, Chenghu, 2001. "Stable equilibrium in beliefs in extensive games with perfect information," Journal of Economic Dynamics and Control, Elsevier, vol. 25(11), pages 1801-1825, November.
  39. Greenberg, Joseph & Monderer, Dov & Shitovitz, Benyamin, 1996. "Multistage Situations," Econometrica, Econometric Society, vol. 64(6), pages 1415-37, November.
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:ecm:feam04:472. 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: (Christopher F. Baum)

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.