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Most economic analyses presume that there are limited differences in the prior beliefs of individuals, an assumption most often justified by the argument that sufficient common experiences and observations will eliminate disagreements. We investigate this claim using a simple model of Bayesian...
Persistent link: https://www.econbiz.de/10012732727
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In the reputation literature, players have \emph{commitment types} which represent the possibility that they do not have standard payoffs but instead are constrained to follow a particular plan. In this paper, we show that arbitrary commitment types can emerge from incomplete information about...
Persistent link: https://www.econbiz.de/10011127591
We show that in any game that is continuous at infinity, if a plan of action a<sub>i</sub> is played by a type t<sub>i</sub> in a Bayesian Nash equilibrium, then there are perturbations of t<sub>i</sub> for which a<sub>i</sub> is the only rationalizable plan and whose unique rationalizable belief regarding the play of the game is...
Persistent link: https://www.econbiz.de/10010970153
Rationalizability is a central solution concept of game theory. Economic models often have many rationalizable outcomes, motivating economists to use refinements of rationalizability, including equilibrium refinements. In this paper we try to achieve a general understanding of when this...
Persistent link: https://www.econbiz.de/10005231341
We analyze "nice" games (where action spaces are compact intervals, utilities continuous and strictly concave in own action), which are used frequently in classical economic models. Without making any "richness" assumption, we characterize the sensitivity of any given Bayesian Nash equilibrium...
Persistent link: https://www.econbiz.de/10008914615
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A long tradition suggests a fundamental distinction between situations of risk, where true objective probabilities are known, and unmeasurable uncertainties where no such probabilities are given. This distinction can be captured in a Bayesian model where uncertainty is represented by the...
Persistent link: https://www.econbiz.de/10011154919
We show that a simple "reputation-style" test can always identify which of two experts is informed about the true distribution. The test presumes no prior knowledge of the true distribution, achieves any desired degree of precision in some fixed finite time, and does not use "counterfactual"...
Persistent link: https://www.econbiz.de/10005231520