A new epistemic model

Pintér, Miklós (2014) A new epistemic model. Working Paper. Corvinus University of Budapest Faculty of Economics, Budapest.

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Meier (2012) gave a "mathematical logic foundation" of the purely measurable universal type space (Heifetz and Samet, 1998). The mathematical logic foundation, however, discloses an inconsistency in the type space literature: a finitary language is used for the belief hierarchies and an infinitary language is used for the beliefs. In this paper we propose an epistemic model to fix the inconsistency above. We show that in this new model the universal knowledgebelief space exists, is complete and encompasses all belief hierarchies. Moreover, by examples we demonstrate that in this model the players can agree to disagree Aumann (1976)'s result does not hold, and Aumann and Brandenburger (1995)'s conditions are not sufficient for Nash equilibrium. However, we show that if we substitute selfevidence (Osborne and Rubinstein, 1994) for common knowledge, then we get at that both Aumann (1976)'s and Aumann and Brandenburger (1995)'s results hold.

Item Type:Monograph (Working Paper)
Series Name:Corvinus Economics Working Papers - CEWP
Series Number / Identification Number:2014/02
Uncontrolled Keywords:Incomplete information game, Agreeing to disagree, Nash equilibrium, Epistemic game theory, Knowledge-belief space, Belief hierarchy, Common knowledge, Self-evidence, Nash equilibrium
JEL classification:C70 - Game Theory and Bargaining Theory: General
C72 - Noncooperative Games
D80 - Information, Knowledge, and Uncertainty: General
D82 - Information, Knowledge, and Uncertainty: Asymmetric and Private Information - Mechanism Design
D83 - Information, Knowledge, and Uncertainty: Search - Learning - Information and Knowledge - Communication - Belief
Subjects:Mathematics, Econometrics
Funders:János Bolyai Research Scholarship of the Hungarian Academy of Sciences
Projects:OTKA, MTA-BCE "Lendület" Strategic Interactions Research Group
ID Code:1530
Deposited By: Ádám Hoffmann
Deposited On:29 Apr 2014 14:52
Last Modified:25 Jul 2014 12:04

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