Bayesian games with unawareness and unawareness perfection

Martin Meier () and Burkhard Schipper

Economic Theory, 2014, vol. 56, issue 2, 219-249

Abstract: Applying unawareness belief structures introduced in Heifetz et al. (Games Econ Behav 77:100–121, 2013a ), we develop Bayesian games with unawareness, define equilibrium, and prove existence. We show how equilibria are extended naturally from lower to higher awareness levels and restricted from higher to lower awareness levels. We apply Bayesian games with unawareness to investigate the robustness of equilibria to uncertainty about opponents’ awareness of actions. We show that a Nash equilibrium of a strategic game is robust to unawareness of actions if and only if it is not weakly dominated. Finally, we discuss the relationship between standard Bayesian games and Bayesian games with unawareness. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Unawareness; Awareness; Type-space; Incomplete information; Bayesian games; Equilibrium; Perfection; Undominated equilibrium; Weak dominance; Admissibility; Inattention; C70; C72; D80; D82 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: Bayesian Games with Unawareness and Unawareness Perfection (2013)
Working Paper: Bayesian Games with Unawareness and Unawareness Perfection (2012)
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DOI: 10.1007/s00199-013-0788-5

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