Sequential Two-Player Games with Ambiguity
If players' beliefs are strictly non-additive, the Dempster-Shafer updating rule can be used to define beliefs off the equilibrium path. We define an equilibrium concept in sequential two-person games where players update their beliefs with the Dempster-Shafer updating rule. We show that in the limit as uncertainty tends to zero, our equilibrium approximates Bayesian Nash equilibrium by imposing context-dependent constraints on beliefs under uncertainty.
|Date of creation:||13 Oct 2003|
|Note:||Financial assistance from the ESRC senior research fellowship scheme, award no. H52427502595, the School of Social Science at the University of Birmingham, the Department of Economics at the University of Melbourne and The British Academy is gratefully acknowledged. For comments we would like to thank Simon Grant, Hans Haller, Youngse Kim, Bart Lipman, Frank Milne, Shasi Nandeibam, Hyun Shin, Peter Sinclair, Willy Spanjers, Martin Summer, Peter Wakker and participants in seminars at Queen|
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