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Solutions of strategic games under common belief of sure-thing principle

Published: 06 July 2009 Publication History

Abstract

In this paper we address the issue which solution concept for strategic games is consistent to common belief that each player satisfies the sure-thing principle. Traditional epistemic analysis takes for granted that there is common belief that each player acts according to some expected utility function. Because our presumptions are milder than the traditional ones we are forced to modify the traditional epistemic approach and follow the idea of Morris (1996) to fasten the beliefs of the players to their preferences. One central finding of our paper is that common belief of sure-thing principle plus state-independence characterizes the solution concept proposed by Börgers (1993).

References

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Börgers, T. (1993). Pure Strategy Dominance. Econometrica, 61:423--430.
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Di Tillo, A. (2008). Subjective Expected Utility in Games. Theoretical Economics, 3:287--323.
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Ellsberg, D. (1961). Risk, Ambiguity, and the Savage Axiom. Quartely Journal of Economics, 75:643--669.
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Epstein, L. (1997). Preference, Rationalizability and Equilibrium. Journal of Economic Theory, 73:1--29.
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Epstein, L. and Wang, T. (1996). "Beliefs about Beliefs" without Probabilities. Econometrica, 64:1343--1373.
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Lo, K. (2000). Rationalizability and the Savage Axioms. Economic Theory, 15:727--733.
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Morris, S. (1996). The Logic of Belief and Belief Change: A Decision Theoretic Approach. Journal of Economic Theory, 69:1--23.
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Savage, L. (1954). The Foundations of Statistics. Wiley, New York.

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TARK '09: Proceedings of the 12th Conference on Theoretical Aspects of Rationality and Knowledge
July 2009
272 pages
ISBN:9781605585604
DOI:10.1145/1562814

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Association for Computing Machinery

New York, NY, United States

Publication History

Published: 06 July 2009

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TARK '09

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TARK '09 Paper Acceptance Rate 29 of 77 submissions, 38%;
Overall Acceptance Rate 61 of 177 submissions, 34%

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