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Awareness as an Equilibrium Notion: Normal-Form Games

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  • Copic, J
  • Galeotti, A

Abstract

We study normal-form games where parts of the games may not be common knowledge. Agents may be aware only of some facts describing the game. An awareness architecture is given by agents' awareness, and an infinite regress of conjectures about other agents and their conjectures. The problem is specified by the true underlying normal-form game, and by the set of possible awareness architectures. Awareness equilibrium is given by a feasible awareness architecture for each agent, strategies that are played and these strategies have to be consistent with the awareness architectures and agents' rationality. We first study games with complete information, where each player may be aware of a subset of the set of possible actions. We then study games with incomplete information, where each player may be aware of a subset of the set of types and probability over types. Our results illustrate how a departure from the assumption of common knowledge alters equilibium predictions.

Suggested Citation

  • Copic, J & Galeotti, A, 2006. "Awareness as an Equilibrium Notion: Normal-Form Games," Economics Discussion Papers 2985, University of Essex, Department of Economics.
    • Handle: RePEc:esx:essedp:2985
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    References listed on IDEAS

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    1. MERTENS, Jean-François & ZAMIR, Shmuel, 1985. "Formulation of Bayesian analysis for games with incomplete information," LIDAM Reprints CORE 608, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Li, Jing, 2009. "Information structures with unawareness," Journal of Economic Theory, Elsevier, vol. 144(3), pages 977-993, May.
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    1. Perea, Andrés, 2022. "Common belief in rationality in games with unawareness," Mathematical Social Sciences, Elsevier, vol. 119(C), pages 11-30.
    2. Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2008. "A canonical model for interactive unawareness," Games and Economic Behavior, Elsevier, vol. 62(1), pages 304-324, January.
    3. Schipper, Burkhard C., 2021. "Discovery and equilibrium in games with unawareness," Journal of Economic Theory, Elsevier, vol. 198(C).
    4. Martin Meier & Burkhard Schipper, 2014. "Bayesian games with unawareness and unawareness perfection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 219-249, June.
    5. Martin Meier & Burkhard Schipper, 2014. "Bayesian games with unawareness and unawareness perfection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 219-249, June.
    6. Auster, Sarah & Pavoni, Nicola, 2024. "Optimal delegation and information transmission under limited awareness," Theoretical Economics, Econometric Society, vol. 19(1), January.

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