Common Priors and Markov Chains
The type function of an agent, in a type space, associates with each state a probability distribution on the type space. Thus, a type function can be considered as a Markov chain on the state space. A common prior for the space turns out to be a probability distribution which is invariant under the type functions of all agents. Using the Markovian structure of type spaces we show that a necessary and sufficient condition for the existence of a common prior is that for each random variable it is common knowledge that all its joint averagings converge to the same value.
|Date of creation:||21 Oct 1996|
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|Note:||Type of Document - postscript; prepared on unix; pages: 8|
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962, University of California, Davis, Department of Economics.
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