IDEAS home Printed from https://ideas.repec.org/p/igi/igierp/681.html
   My bibliography  Save this paper

The Epistemic Spirit of Divinity

Author

Listed:
  • Pierpaolo Battigalli
  • Emiliano Catonini

Abstract

We study strategic reasoning in a signaling game where players have common belief in an outcome distribution and in the event that the receiver believes that the sender's first-order beliefs are independent of her payoff-type. We characterize the behavioral implications of these epistemic hypotheses through a rationalizability procedure with second-order belief restrictions. Our solution concept is related to, but weaker than Divine Equilibrium (Banks and Sobel, 1987). First, we do not obtain sequential equilibrium, but just Perfect Bayesian Equilibrium with heterogeneous off-path beliefs (Fudenberg and He, 2018). Second, when we model how the receiver may rationalize a particular deviation, we take into account that some types could have preferred a different deviation, and we show this is natural and relevant via an economic example.

Suggested Citation

  • Pierpaolo Battigalli & Emiliano Catonini, 2022. "The Epistemic Spirit of Divinity," Working Papers 681, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    • Handle: RePEc:igi:igierp:681
    as

    Download full text from publisher

    File URL: https://repec.unibocconi.it/igier/igi/wp/2022/681.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Emiliano Catonini, 2022. "A Dutch book argument for belief consistency," Papers 2202.10121, arXiv.org.
    2. Lawrence Blume & Adam Brandenburger & Eddie Dekel, 2014. "Lexicographic Probabilities and Choice Under Uncertainty," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 6, pages 137-160, World Scientific Publishing Co. Pte. Ltd..
    3. , & ,, 2015. "Rationalizable partition-confirmed equilibrium," Theoretical Economics, Econometric Society, vol. 10(3), September.
    4. Battigalli Pierpaolo & Prestipino Andrea, 2013. "Transparent Restrictions on Beliefs and Forward-Induction Reasoning in Games with Asymmetric Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 13(1), pages 79-130, May.
    5. Drew Fudenberg & Kevin He, 2018. "Learning and Type Compatibility in Signaling Games," Econometrica, Econometric Society, vol. 86(4), pages 1215-1255, July.
    6. Kohlberg, Elon & Mertens, Jean-Francois, 1986. "On the Strategic Stability of Equilibria," Econometrica, Econometric Society, vol. 54(5), pages 1003-1037, September.
    7. Emiliano Catonini, 2021. "Self-enforcing Agreements and Forward Induction Reasoning," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(2), pages 610-642.
    8. Battigalli, P. & Catonini, E. & Manili, J., 2023. "Belief change, rationality, and strategic reasoning in sequential games," Games and Economic Behavior, Elsevier, vol. 142(C), pages 527-551.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fudenberg, Drew & He, Kevin, 2021. "Player-compatible learning and player-compatible equilibrium," Journal of Economic Theory, Elsevier, vol. 194(C).
    2. Fudenberg, Drew & He, Kevin, 2020. "Payoff information and learning in signaling games," Games and Economic Behavior, Elsevier, vol. 120(C), pages 96-120.
    3. Clark, Daniel & Fudenberg, Drew & He, Kevin, 2022. "Observability, dominance, and induction in learning models," Journal of Economic Theory, Elsevier, vol. 206(C).
    4. Françoise Forges & József Sákovics, 2022. "Tenable threats when Nash equilibrium is the norm," International Journal of Game Theory, Springer;Game Theory Society, vol. 51(3), pages 589-605, November.
    5. Catonini, Emiliano, 2019. "Rationalizability and epistemic priority orderings," Games and Economic Behavior, Elsevier, vol. 114(C), pages 101-117.
    6. Emiliano Catonini, 2022. "A Dutch book argument for belief consistency," Papers 2202.10121, arXiv.org.
    7. Asheim, G.B. & Dufwenberg, M., 1996. "Admissibility and Common Knowledge," Discussion Paper 1996-16, Tilburg University, Center for Economic Research.
    8. Mailath, George J. & Samuelson, Larry & Swinkels, Jeroen M., 1997. "How Proper Is Sequential Equilibrium?," Games and Economic Behavior, Elsevier, vol. 18(2), pages 193-218, February.
    9. Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2019. "Comprehensive rationalizability," Games and Economic Behavior, Elsevier, vol. 116(C), pages 185-202.
    10. Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2013. "Dynamic unawareness and rationalizable behavior," Games and Economic Behavior, Elsevier, vol. 81(C), pages 50-68.
    11. Ziegler, Gabriel & Zuazo-Garin, Peio, 2020. "Strategic cautiousness as an expression of robustness to ambiguity," Games and Economic Behavior, Elsevier, vol. 119(C), pages 197-215.
    12. Govindan, Srihari & Wilson, Robert B., 2005. "Justification of Stable Equilibria," Research Papers 1896, Stanford University, Graduate School of Business.
    13. Burkhard C. Schipper & Hang Zhou, 2022. "Level-k Thinking in the Extensive Form," Working Papers 352, University of California, Davis, Department of Economics.
    14. Dekel, Eddie & Siniscalchi, Marciano, 2015. "Epistemic Game Theory," Handbook of Game Theory with Economic Applications,, Elsevier.
    15. Catonini, Emiliano, 2020. "On non-monotonic strategic reasoning," Games and Economic Behavior, Elsevier, vol. 120(C), pages 209-224.
    16. Barelli, Paulo & Galanis, Spyros, 2013. "Admissibility and event-rationality," Games and Economic Behavior, Elsevier, vol. 77(1), pages 21-40.
    17. Pomatto, Luciano, 2022. "Stable matching under forward-induction reasoning," Theoretical Economics, Econometric Society, vol. 17(4), November.
    18. Lee, Byung Soo, 2013. "Conditional Beliefs and Higher-Order Preferences," MPRA Paper 48551, University Library of Munich, Germany.
    19. Battigalli, P. & Catonini, E. & Manili, J., 2023. "Belief change, rationality, and strategic reasoning in sequential games," Games and Economic Behavior, Elsevier, vol. 142(C), pages 527-551.
    20. Perea ý Monsuwé, A., 2003. "Proper rationalizability and belief revision in dynamic games," Research Memorandum 048, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:igi:igierp:681. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.igier.unibocconi.it/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.