Rationalizability, observability, and common knowledge
We study the strategic impact of players’ higher-order uncertainty over the observability of actions in general two-player games. More specifically, we consider the space of all belief hierarchies generated by the uncertainty over whether the game will be played as a static game or with perfect info...
| Autores: | , |
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2022 |
| País: | España |
| Institución: | Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya) |
| Repositorio: | Recercat. Dipósit de la Recerca de Catalunya |
| OAI Identifier: | oai:recercat.cat:10230/58742 |
| Acceso en línea: | http://hdl.handle.net/10230/58742 http://dx.doi.org/10.1093/restud/rdab047 |
| Access Level: | acceso abierto |
| Palabra clave: | Eductive co-ordination Extensive-form uncertainty First-mover advantage Kreps Hypothesis Higher-order beliefs Rationalizability Robustness Stackelberg selections |
| Sumario: | We study the strategic impact of players’ higher-order uncertainty over the observability of actions in general two-player games. More specifically, we consider the space of all belief hierarchies generated by the uncertainty over whether the game will be played as a static game or with perfect information. Over this space, we characterize the correspondence of a solution concept which captures the behavioural implications of Rationality and Common Belief in Rationality (RCBR), where “rationality” is understood as sequential whenever the game is dynamic. We show that such a correspondence is generically single-valued, and that its structure supports a robust refinement of rationalizability, which often has very sharp implications. For instance, (1) in a class of games which includes both zero-sum games with a pure equilibrium and coordination games with a unique efficient equilibrium, RCBR generically ensures efficient equilibrium outcomes (eductive coordination); (2) in a class of games which also includes other well-known families of coordination games, RCBR generically selects components of the Stackelberg profiles (Stackelberg selection); (3) if it is commonly known that player ’s action is not observable (e.g. because is commonly known to move earlier, etc.), in a class of games which includes all of the above RCBR generically selects the equilibrium of the static game most favourable to player (pervasiveness of first-mover advantage). |
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