Self-Consistency and Common Prior in Non-Partitional Knowledge Models

Luciana C. Fiorini and José Rodrigues-Neto

ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics

Abstract: In non-partitional models of knowledge with objective and subjective state spaces, the issue of self-consistency arises. The present paper de?nes a multigraph Gj for each player j, and also a global multigraph G. The posteriors of player j are self-consistent if and only if all cycle equations associated with cycles in Gj are satis?ed. Similarly, the posteriors of all players are consistent with a common prior when all cycle equations corresponding to the cycles in G are satis?ed. In particular, the self-consistency of player j is automatic when Gj is acyclic. Consistency always holds when G is acyclic, regardless of any probabilistic information. There is a simple formula to check for the acyclicity of Gj , and another formula to check for the acyclicity of G.

Keywords: consistency; correspondence; cycle; knowledge; partition; prior; posterior (search for similar items in EconPapers)
JEL-codes: C02 D80 D82 D83 (search for similar items in EconPapers)
Date: 2014-12
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2014-621

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