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Unawareness in Dynamic Psychological Games

Author

Listed:
  • Carsten S. Nielsen

    (Department of Economics, University of Copenhagen)

  • Alexander Sebald

    (Department of Economics, University of Copenhagen)

Abstract

Building on Battigalli and Dufwenberg (2009)'s framework of dynamic psychological games and the recent progress in the modeling of dynamic unawareness, we provide a general framework that allows for `unawareness' in the strategic interaction of players motivated by belief-dependent psychological preferences like reciprocity and guilt. We show that unawareness has a pervasive impact on the strategic interaction of psychologically motivated players. Intuitively, unawareness influences players' beliefs concerning, for example, the intentions and expectations of others which in turn impacts their behavior. Moreover, we highlight the strategic role of communication concerning feasible paths of play in these environments.

Suggested Citation

  • Carsten S. Nielsen & Alexander Sebald, 2010. "Unawareness in Dynamic Psychological Games," Discussion Papers 10-19, University of Copenhagen. Department of Economics, revised Feb 2011.
  • Handle: RePEc:kud:kuiedp:1019
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    File URL: http://www.econ.ku.dk/english/research/publications/wp/dp_2010/1019rev.pdf/
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    Cited by:

    1. 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.
    2. Nielsen Carsten S. & Sebald Alexander, 2017. "Simple Unawareness in Dynamic Psychological Games," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 17(1), pages 1-29, January.

    More about this item

    Keywords

    unawareness; extensive-form games; communication; belief-dependent preferences; sequential equilibrium;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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