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The Deception of the Greeks: Generalizing the Information Structure of Extensive Form Games

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  • Oliver Board

Abstract

The standard model of an extensive form game rules out an important phenomenon in situations of strategic interaction: deception. Using examples from the world of ancient Greece and from modern-day Wall Street, we show how the model can be generalized to incorporate this phenomenon. Deception takes place when the action observed by a player is different from the action actually taken. The standard model does allow imperfect information (modeled by non-singleton information sets), but not deception: the actual action taken is never ruled out. Our extension of extensive form games relaxes the assumption that the information sets partition the set of nodes, so that the set of nodes considered possible after a certain action is taken might not include the actual node. We discuss the implications of this relaxation, and show that in certain games deception is inconsistent with common knowledge of rationality even along the backward induction path. `You are to hear now how the Greeks tricked us. From this one proof of their perfidy you may understand them all` (Aeneas).

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  • Oliver Board, 2002. "The Deception of the Greeks: Generalizing the Information Structure of Extensive Form Games," Economics Series Working Papers 137, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:137
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    References listed on IDEAS

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    Cited by:

    1. Board, Oliver, 2004. "Dynamic interactive epistemology," Games and Economic Behavior, Elsevier, vol. 49(1), pages 49-80, October.
    2. Board, Oliver, 2003. "The not-so-absent-minded driver," Research in Economics, Elsevier, vol. 57(3), pages 189-200, September.
    3. Paulson, Elisabeth C. & Linkov, Igor & Keisler, Jeffrey M., 2016. "A game theoretic model for resource allocation among countermeasures with multiple attributes," European Journal of Operational Research, Elsevier, vol. 252(2), pages 610-622.
    4. Jun Zhuang & Vicki M. Bier, 2010. "Reasons for Secrecy and Deception in Homeland‐Security Resource Allocation," Risk Analysis, John Wiley & Sons, vol. 30(12), pages 1737-1743, December.

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    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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