Interim Partially Correlated Rationalizability
In game theory, there is a basic methodological dichotomy between Harsanyi's "game-theoretic" view and Aumann's "Bayesian decision-theoretic" view of the world. We follow the game-theoretic view, propose and study interim partially correlated rationalizability for games with incomplete information. We argue that the distinction between this solution concept and the interim correlated rationalizability studied by Dekel, Fudenberg and Morris (2007) is fundamental, in that the latter implicitly follows Aumann's Bayesian view. Our main result shows that two types provide the same prediction in interim partially correlated rationalizability if and only if they have the same infinite hierarchy of beliefs over conditional beliefs. We also establish an equivalence result between this solution concept and the Bayesian solution--a notion of correlated equilibrium proposed by Forges (1993).
|Date of creation:||11 Nov 2010|
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- Jeffrey C. Ely & Marcin Peski, .
"Hierarchies Of Belief And Interim Rationalizability,"
1388, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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3196333, Harvard University Department of Economics.
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