Epistemic Game Theory

Research output: Chapter in Book/Report/Conference proceedingChapter

39 Scopus citations

Abstract

Epistemic game theory formalizes assumptions about rationality and mutual beliefs in a formal language, then studies their behavioral implications in games. Specifically, it asks: what do different notions of rationality and different assumptions about what players believe about.. .what others believe about the rationality of players imply regarding play in a game? Being explicit about these assumptions can be important, because solution concepts are often motivated intuitively in terms of players' beliefs and their rationality; however, the epistemic analysis may show limitations in these intuitions, reveal what additional assumptions are hidden in the informal arguments, clarify the concepts or show how the intuitions can be generalized. A further premise of this chapter is that the primitives of the model- namely, the hierarchies of beliefs-should be elicitable, at least in principle. Building upon explicit assumptions about elicitable primitives, we present classical and recent developments in epistemic game theory and provide characterizations of a nonexhaustive, but wide, range of solution concepts.

Original languageEnglish (US)
Title of host publicationHandbook of Game Theory with Economic Applications
PublisherElsevier B.V.
Pages619-702
Number of pages84
Edition1
DOIs
StatePublished - 2015

Publication series

NameHandbook of Game Theory with Economic Applications
Number1
Volume4
ISSN (Print)1574-0005

Keywords

  • Backward induction
  • Common-prior assumption
  • Conditional probability systems
  • Epistemic game theory
  • Forward induction
  • Hierarchies of beliefs
  • Interactive epistemology
  • Lexicographic probability systems
  • Rationalizability
  • Solution concepts

ASJC Scopus subject areas

  • Statistics and Probability
  • Economics and Econometrics
  • Statistics, Probability and Uncertainty
  • Applied Mathematics

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