Strategic Knowledge Sharing in Bayesian Games: A General Model

This paper provides a general model for the study of strategic knowledge sharing in any finite Bayesian game. Unlike earlier papers on strategic information revelation, higher-order uncertainties can be incorporated into the model. We propose an equilibrium concept, called knowledge equilibrium, which takes into account voluntary, public, and decentralized communication possibilities of exogenously certifiable statements. After the communication stage, beliefs are explicitly deduced from consistent possibility correspondences, without making reference to sequences of perturbed games. Several properties of knowledge equilibria and revised knowledge are examined. In particular, it is shown that a knowledge equilibrium is always a sequential equilibrium of the associated extensive form game with communication.