Characterizing Assumption of Rationality by Incomplete Information
Econometrics
2018-01-16 v1
Abstract
We characterize common assumption of rationality of 2-person games within an incomplete information framework. We use the lexicographic model with incomplete information and show that a belief hierarchy expresses common assumption of rationality within a complete information framework if and only if there is a belief hierarchy within the corresponding incomplete information framework that expresses common full belief in caution, rationality, every good choice is supported, and prior belief in the original utility functions.
Cite
@article{arxiv.1801.04714,
title = {Characterizing Assumption of Rationality by Incomplete Information},
author = {Shuige Liu},
journal= {arXiv preprint arXiv:1801.04714},
year = {2018}
}