Two Characterizations of Consistency
This paper offers two characterizations of the Kreps-Wilson concept of consistent beliefs. One is primarily of applied interest: beliefs are consistent iff they can be constructed by multiplying together vectors of monomials which induce the strategies. The other is primarily of conceptual interest: beliefs are consistent iff they can be induced by a "product dispersion" whose marginal dispersions induce the strategies (a "dispersion" is defined as a relative probability system, and a "product" dispersion is defined as a joint dispersion whose marginal dispersions are independent). Both these characterizations are derived with linear algebra.
|Date of creation:||2005|
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- Peter A. Streufert, 2003.
"Products of Representations Characterize the Products of Dispersions and the Consistency of Beliefs,"
UWO Department of Economics Working Papers
20039, University of Western Ontario, Department of Economics.
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