 A new epistemic characterization of ε-proper rationalizabilityAndrés Perea and Souvik Roy () Games and Economic Behavior, 2017, vol. 104, issue C, 309-328 Abstract: For a given ε>0, the concept of ε-proper rationalizability (Schuhmacher, 1999) is based on two assumptions: (1) every player is cautious, i.e., does not exclude any opponent's choice from consideration, and (2) every player satisfies the ε-proper trembling condition, i.e., the probability he assigns to an opponent's choice a is at most ε times the probability he assigns to b whenever he believes the opponent to prefer b to a. In this paper we show that a belief hierarchy is ε-properly rationalizable in the complete information framework, if and only if, there is an equivalent belief hierarchy within the incomplete information framework that expresses common belief in the events that (1) players are cautious, (2) the players' beliefs about the opponent's utilities are “centered around the original utilities” in some specific way parametrized by ε, and (3) players rationalize each opponent's choice by a utility function that is as close as possible to the original utility function. Keywords: Epistemic game theory; Incomplete information; Proper rationalizability (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:104:y:2017:i:c:p:309-328 DOI: 10.1016/j.geb.2017.04.009 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
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