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Towards a Characterization of Rational Expectations

  • Itai Arieli

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    R. J. Aumann and J. H. Drèze (2008) define a rational expectation of a player i in a game G as the expected payo of some type of i in some belief system for G in which common knowledge of rationality and common priors obtain. Our goal is to characterize the set of rational expectations in terms of the game's payoff matrix. We provide such a characterization for a specific class of strategic games, called semi-elementary, which includes Myerson's "elementary" games.

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    File URL: http://ratio.huji.ac.il/sites/default/files/publications/dp475.pdf
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    Paper provided by The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem in its series Discussion Paper Series with number dp475.

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    Length: 18 pages
    Date of creation: Jan 2008
    Date of revision:
    Handle: RePEc:huj:dispap:dp475
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    1. R. Aumann, 2010. "Subjectivity and Correlation in Randomized Strategies," Levine's Working Paper Archive 389, David K. Levine.
    2. Myerson, Roger B., 1997. "Dual Reduction and Elementary Games," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 183-202, October.
    3. Robert J. Aumann & Jacques H. Dreze, 2008. "Rational Expectations in Games," American Economic Review, American Economic Association, vol. 98(1), pages 72-86, March.
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