The Bayesian Solution and Hierarchies of Beliefs
The Bayesian solution is a notion of correlated equilibrium proposed by Forges (1993), and hierarchies of beliefs over conditional beliefs are introduced by Ely and Pęski (2006) in their study of interim rationalizability. We study the connection between the two concepts. We say that two type spaces are equivalent if they represent the same set of hierarchies of beliefs over conditional beliefs. We show that the correlation embedded in equivalent type spaces can be characterized by partially correlating devices, which send correlated signals to players in a belief invariant way. Since such correlating devices also implement the Bayesian solution, we establish that the Bayesian solution is invariant across equivalent type spaces.
|Date of creation:||09 Nov 2010|
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- repec:dau:papers:123456789/157 is not listed on IDEAS
- Dekel, Eddie & Fudenberg, Drew & Morris, Stephen, 2007. "Interim correlated rationalizability," Theoretical Economics, Econometric Society, vol. 2(1), pages 15-40, March.
- Eddie Dekel & Drew Fudenberg & Stephen Morris, 2006. "Interim Correlated Rationalizability," Levine's Bibliography 122247000000001188, UCLA Department of Economics.
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- Tang, Qianfeng, 2010. "Interim Partially Correlated Rationalizability," MPRA Paper 26810, University Library of Munich, Germany. Full references (including those not matched with items on IDEAS)
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