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From Posteriors to Priors via Cycles: An Addendum

Author

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  • Martin Hellwig

    () (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

Rodrigues-Neto (2009) has shown that a given specification of posteriors of different players in an incomplete-information setting is compatible with a common prior if and only if the posteriors satisfy the so-called cycle equations. This note shows that, if, for any player, any element of the partition of the this player has a nonempty intersection with any element of the partition of any other player, then it suffices to verify the cycle equations for all cycles of length 4 or less.

Suggested Citation

  • Martin Hellwig, 2011. "From Posteriors to Priors via Cycles: An Addendum," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_07, Max Planck Institute for Research on Collective Goods.
  • Handle: RePEc:mpg:wpaper:2011_07
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    References listed on IDEAS

    as
    1. Samet, Dov, 1998. "Common Priors and Separation of Convex Sets," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 172-174, July.
    2. Hellman, Ziv & Samet, Dov, 2012. "How common are common priors?," Games and Economic Behavior, Elsevier, vol. 74(2), pages 517-525.
    3. Feinberg, Yossi, 2000. "Characterizing Common Priors in the Form of Posteriors," Journal of Economic Theory, Elsevier, vol. 91(2), pages 127-179, April.
    4. Rodrigues-Neto, José Alvaro, 2012. "The cycles approach," Journal of Mathematical Economics, Elsevier, vol. 48(4), pages 207-211.
    5. Morris, Stephen, 1994. "Trade with Heterogeneous Prior Beliefs and Asymmetric Information," Econometrica, Econometric Society, vol. 62(6), pages 1327-1347, November.
    6. John C. Harsanyi, 1967. "Games with Incomplete Information Played by "Bayesian" Players, I-III Part I. The Basic Model," Management Science, INFORMS, vol. 14(3), pages 159-182, November.
    7. Samet, Dov, 1998. "Iterated Expectations and Common Priors," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 131-141, July.
    8. Rodrigues-Neto, José Alvaro, 2009. "From posteriors to priors via cycles," Journal of Economic Theory, Elsevier, vol. 144(2), pages 876-883, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. José Rodrigues-Neto, 2014. "Monotonic models and cycles," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(2), pages 403-413, May.
    2. Rodrigues-Neto, José Alvaro, 2012. "The cycles approach," Journal of Mathematical Economics, Elsevier, vol. 48(4), pages 207-211.
    3. repec:eee:matsoc:v:87:y:2017:i:c:p:11-21 is not listed on IDEAS

    More about this item

    Keywords

    Belief systems; consistency; common priors; cycle equations;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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