Approximate knowledge of rationality and correlated equilibria
We extend Aumann's  theorem, deriving correlated equilibria as a consequence of common priors and common knowledge of rationality, by explicitly allowing for non-rational behavior. We replace the assumption of common knowledge of rationality with a substantially weaker one, joint p-belief of rationality, where agents believe the other agents are rational with probabilities p = (pi)i?I or more. We show that behavior in this case constitutes a type of correlated equilibrium satisfying certain p-belief constraints, and that it varies continuously in the parameters p and, for p sufficiently close to one, with high probability is supported on strategies that survive the iterated elimination of strictly dominated strategies. Finally, we extend the analysis to characterizing rational expectations of interim types, to games of incomplete information, as well as to the case of non-common priors.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- T. Börgers, 2010.
"Weak Dominance and Approximate Common Knowledge,"
Levine's Working Paper Archive
378, David K. Levine.
- Sergiu Hart, 2005.
Econometric Society, vol. 73(5), pages 1401-1430, 09.
When requesting a correction, please mention this item's handle: RePEc:upf:upfgen:1326. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.