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Characterizing Assumption of Rationality by Incomplete Information

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  • Shuige Liu

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.

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  • Shuige Liu, 2018. "Characterizing Assumption of Rationality by Incomplete Information," Papers 1801.04714, arXiv.org.
    • Handle: RePEc:arx:papers:1801.04714
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