TY - CHAP

T1 - Epistemic Game Theory

AU - Dekel, Eddie

AU - Siniscalchi, Marciano

N1 - Funding Information:
We thank Drew Fudenberg for his detailed comments and Robert Molony and Luciano Pomatto for excellent research assistantship. We also thank Pierpaolo Battigalli, Adam Brandenburger, Yi-Chun Chen, Amanda Friedenberg, Joe Halpern, Qingmin Liu, Andres Perea, two anonymous referees, and the editors, Peyton Young and Shmuel Zamir, for helpful feedback. Eddie Dekel gratefully acknowledges financial support from NSF grant SES-1227434.

PY - 2015

Y1 - 2015

N2 - 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.

AB - 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.

KW - Backward induction

KW - Common-prior assumption

KW - Conditional probability systems

KW - Epistemic game theory

KW - Forward induction

KW - Hierarchies of beliefs

KW - Interactive epistemology

KW - Lexicographic probability systems

KW - Rationalizability

KW - Solution concepts

UR - http://www.scopus.com/inward/record.url?scp=84922426314&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84922426314&partnerID=8YFLogxK

U2 - 10.1016/B978-0-444-53766-9.00012-4

DO - 10.1016/B978-0-444-53766-9.00012-4

M3 - Chapter

AN - SCOPUS:84922426314

T3 - Handbook of Game Theory with Economic Applications

SP - 619

EP - 702

BT - Handbook of Game Theory with Economic Applications

PB - Elsevier B.V.

ER -