Inductive Reasoning About Unawareness

Simon Grant and John Quiggin

No 151202, Risk and Sustainable Management Group Working Papers from University of Queensland, School of Economics

Abstract: We develop a model of games with awareness that allows for differential levels of awareness. We show that, for the standard modal logical interpretations of belief and awareness, a player cannot believe there exist propositions of which he is unaware. Nevertheless, we argue that a boundedly rational individual may regard the possibility that there exist propositions of which she is unaware as being supported by inductive reasoning, based on past experience and consideration of the limited awareness of others. In this paper, we provide a formal representation of inductive reasoning in the context of a dynamic game with differential awareness. We show that, given differential awareness over time and between players, individuals can derive inductive support for propositions expressing their own unawareness. We consider the ecological rationality of heuristics to guide decisions in problems involving differential awareness.

Keywords: Industrial Organization; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 43
Date: 2012-04-15
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Inductive reasoning about unawareness (2013)
Working Paper: Inductive Reasoning About Unawareness (2009)
Working Paper: Inductive reasoning about unawareness (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uqsers:151202

DOI: 10.22004/ag.econ.151202

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