Interdependent Preferences and Strategic Distinguishability

Dirk Bergemann, Stephen Morris and Satoru Takahashi

No 1772R3, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We study agents whose expected utility preferences are interdependent for informational or psychological reasons. We characterize when two types can be “strategically distinguished” in the sense that they are guaranteed to behave differently in some finite mechanism. We show that two types are strategically distinguishable if and only if they have different hierarchies of interdependent preferences. The same characterization applies for rationalizability, equilibrium, and any interim solution concept in between. Our results generalize and unify results of Abreu and Matsushima (1992), who characterize strategic distinguishability on fixed finite type spaces, and Dekel, Fudenberg, and Morris (2006), (2007), who characterize strategic distinguishability without interdependent preferences.

Keywords: Interdependent preferences; Higher-order preference hierarchy; Hierarchy of Preferences; Strategic distinguishability (search for similar items in EconPapers)
JEL-codes: C79 D82 D83 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2010-09, Revised 2016-08
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Related works:
Journal Article: Interdependent preferences and strategic distinguishability (2017)
Working Paper: Interdependent Preferences and Strategic Distinguishability (2014)
Working Paper: Interdependent Preferences and Strategic Distinguishability (2011)
Working Paper: Interdependent Preferences and Strategic Distinguishability (2011)
Working Paper: Interdependent Preferences and Strategic Distinguishability (2011)
Working Paper: Interdependent Preferences and Strategic Distinguishability (2010)
Working Paper: Interdependent Preferences and Strategic Distinguishability (2010)
Working Paper: Interdependent Preferences and Strategic Distinguishability (2010)
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