Object-based unawareness: Theory and applications

Oliver J. Board () and Kim-Sau Chung ()
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Oliver J. Board: Paul | Weiss, USA
Kim-Sau Chung: Department of Economics, Hong Kong Baptist University, China

The Journal of Mechanism and Institution Design, 2022, vol. 7, issue 1, 1-43

Abstract: In this paper and its companion paper, Board and Chung (2021), we provide foundations for a model of unawareness that can be used to distinguish between what an agent is unaware of and what she simply does not know. At an informal level, this distinction plays a key role in a number of recent papers such as Tirole (2009) and Chung and Fortnow (2007). Here we provide a set-theoretic (i.e., non-linguistic) version of our framework. We use our object-based unawareness structures to investigate two applications. The first application provides a justification for the contra proferentem doctrine of contract interpretation, under which ambiguous terms in a contract are construed against the drafter. Our second application examines speculative trade.

Keywords: Unawareness; legal doctrine; no-trade theorem. (search for similar items in EconPapers)
JEL-codes: D83 D86 D91 K12 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:jmi:articl:jmi-v7i1a1

DOI: 10.22574/jmid.2022.12.001

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