Unawareness in Dynamic Psychological Games

Carsten S. Nielsen and Alexander Sebald ()
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Carsten S. Nielsen: Department of Economics, University of Copenhagen

No 10-19, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: Building on Battigalli and Dufwenberg (2009)'s framework of dynamic psychological games and the recent progress in the modeling of dynamic unawareness, we provide a general framework that allows for `unawareness' in the strategic interaction of players motivated by belief-dependent psychological preferences like reciprocity and guilt. We show that unawareness has a pervasive impact on the strategic interaction of psychologically motivated players. Intuitively, unawareness influences players' beliefs concerning, for example, the intentions and expectations of others which in turn impacts their behavior. Moreover, we highlight the strategic role of communication concerning feasible paths of play in these environments.

Keywords: unawareness; extensive-form games; communication; belief-dependent preferences; sequential equilibrium (search for similar items in EconPapers)
JEL-codes: C72 C73 D80 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2010-08, Revised 2011-02
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth and nep-neu
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:1019

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