A new epistemic model

Miklós Pintér

Corvinus Economics Working Papers (CEWP) from Corvinus University of Budapest

Abstract: Meier (2012) gave a "mathematical logic foundation" of the purely measurable universal type space (Heifetz and Samet, 1998). The mathematical logic foundation, however, discloses an inconsistency in the type space literature: a finitary language is used for the belief hierarchies and an infinitary language is used for the beliefs. In this paper we propose an epistemic model to fix the inconsistency above. We show that in this new model the universal knowledgebelief space exists, is complete and encompasses all belief hierarchies. Moreover, by examples we demonstrate that in this model the players can agree to disagree Aumann (1976)'s result does not hold, and Aumann and Brandenburger (1995)'s conditions are not sufficient for Nash equilibrium. However, we show that if we substitute selfevidence (Osborne and Rubinstein, 1994) for common knowledge, then we get at that both Aumann (1976)'s and Aumann and Brandenburger (1995)'s results hold.

Keywords: Incomplete information game; Agreeing to disagree; Nash equilibrium; Epistemic game theory; Knowledge-belief space; Belief hierarchy; Common knowledge; Self-evidence; Nash equilibrium (search for similar items in EconPapers)
JEL-codes: C70 C72 D80 D82 D83 (search for similar items in EconPapers)
Date: 2014-04-18
New Economics Papers: this item is included in nep-gth, nep-hpe and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:cvh:coecwp:2014/02

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