Original language | English (US) |
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Title of host publication | The New Palgrave Dictionary of Economics, |
Editors | Steven N Durlauf, Lawrence E Blume |
Publisher | Palgrave-Macmillan |
Edition | 2 |
ISBN (Electronic) | 978-1-349-58802-2 |
ISBN (Print) | 978-0-333-78676-5 |
State | Published - 2008 |
Abstract
Modelling what each agent believes about her opponents, what she believes her opponents believe about her, and so on, plays a prominent role in game theory and its applications. This article describes Harsanyi’s formalism of type spaces, which provides a simple, elegant representation of probabilistic belief hierarchies. A special emphasis is placed on the construction of rich type spaces, which can generate all ‘reasonable’ belief hierarchies in a given game. Recent developments, employing richer representation of beliefs, are also considered.