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Interactive Epistemology and Solution Concepts for Games with Asymmetric Information

Author

Listed:
  • Battigalli Pierpaolo

    (Bocconi University, pierpaolo.battigalli@unibocconi.it)

  • Di Tillio Alfredo

    (Bocconi University, alfredo.ditillio@unibocconi.it)

  • Grillo Edoardo

    (Princeton University, egrillo@princeton.edu)

  • Penta Antonio

    (University of Wisconsin-Madison, apenta@ssc.wisc.edu)

Abstract

We use an interactive epistemology framework to provide a systematic analysis of some solution concepts for games with asymmetric information. We characterize solution concepts using expressible epistemic assumptions, represented as events in the canonical space generated by primitive uncertainty about the payoff relevant state, payoff irrelevant information, and actions. In most of the paper, we adopt an interim perspective, which is appropriate to analyze genuine incomplete information. We relate Delta-rationalizability (Battigalli and Siniscalchi, Advances in Theoretical Economics 3, 2003) to interim correlated rationalizability (Dekel, Fudenberg and Morris, Theoretical Economics 2, 2007) and to rationalizability in the interim strategic form. We also consider the ex ante perspective, which is appropriate to analyze asymmetric information about an initial chance move. We prove the equivalence between interim correlated rationalizability and an ex ante notion of correlated rationalizability.

Suggested Citation

  • Battigalli Pierpaolo & Di Tillio Alfredo & Grillo Edoardo & Penta Antonio, 2011. "Interactive Epistemology and Solution Concepts for Games with Asymmetric Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 11(1), pages 1-40, March.
    • Handle: RePEc:bpj:bejtec:v:11:y:2011:i:1:n:6
    DOI: 10.2202/1935-1704.1637
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    More about this item

    Keywords

    asymmetric information; type spaces; Bayesian games; rationalizability;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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