Commonality of information and commonality of beliefs

Yu Awaya () and Vijay Krishna
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Yu Awaya: Department of Economics, University of Rochester

Theoretical Economics, Forthcoming

Abstract: A group of agents with a common prior receive informative signals about an unknown state repeatedly over time. If these signals were public, agents' beliefs would be identical and commonly known. This suggests that if signals were private, then the more correlated these are, the greater the commonality of beliefs. We show that, in fact, the opposite may be true. In the long run, conditionally independent signals may achieve greater commonality of beliefs than correlated ones.

Keywords: Common learning; correlation (search for similar items in EconPapers)
JEL-codes: D83 (search for similar items in EconPapers)
Date: 2025-01-31
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