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Epistemic Conditions for Agreement and Stochastic Independence of epsilon-Contaminated Beliefs

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  • Kin Chung Lo

    () (York University, Canada)

Abstract

This paper studies strategic games in which the beliefs of each player are represented by a set of probability measures satisfying a parametric specialization that is called epsilon-contamination. That is, beliefs are represented by a set of probability measures, where every measure in the set has the form (1 - epsilon)P*+epsilon.p, p*being the benchmark probability measure, p being contamination,and epsilon reflecting the amount of error in p* that is deemed possible. Under a suitably modified common prior assumption, if beliefs about opponents' action choices are common knowlegdge, then beliefs satisfy some properties that can be interpreted as agreement and stochastic independence.

Suggested Citation

  • Kin Chung Lo, 1998. "Epistemic Conditions for Agreement and Stochastic Independence of epsilon-Contaminated Beliefs," Working Papers 1998_02, York University, Department of Economics.
  • Handle: RePEc:yca:wpaper:1998_02
    as

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    File URL: http://dept.econ.yorku.ca/research/workingPapers/working_papers/contam4.pdf
    File Function: First version, 1998
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    References listed on IDEAS

    as
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    5. Lawrence Blume & Adam Brandenburger & Eddie Dekel, 2014. "Lexicographic Probabilities and Choice Under Uncertainty," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 6, pages 137-160, World Scientific Publishing Co. Pte. Ltd..
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    20. Mukerji, S., 1995. "A theory of play for games in strategic form when rationality is not common knowledge," Discussion Paper Series In Economics And Econometrics 9519, Economics Division, School of Social Sciences, University of Southampton.
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    Cited by:

    1. Simon Grant & Atsushi Kajii, 2005. "Probabilistically Sophisticated Multiple Priors," KIER Working Papers 608, Kyoto University, Institute of Economic Research.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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