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
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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 -