AGREEING TO DISAGREE: A SURVEY

Giacomo Bonanno () and Klaus Nehring

Department of Economics from California Davis - Department of Economics

Abstract: Aumann (1976) put forward a formal definition of common knowledge and used it to prove that two "like minded" individuals cannot "agree to disagree" in the following sense. If they start from a common prior and update the probability of an event E (using Bayes' rule) on the basis of private information, then it cannot be common knowledge between them that individual 1 assigns probability p to E and individual 2 assigns probability q to E with p ¹ q. In other words, if their posteriors of event E are common knowledge then they must coincide. Aumann's Agreement Theorem has given rise to a large literature which we review in this paper. The results are classified according to whether they are probabilistic (Bayesian) or qualitative. Particular attention is paid to the issue of how to interpret the notion of Harsanyi consistency as a (local) property of belief hierarchies.

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