Robust Equilibria under Non-Common Priors

Daisuke Oyama and Olivier Tercieux

MPRA Paper from University Library of Munich, Germany

Abstract: This paper considers the robustness of equilibria to a small amount of incomplete information, where players are allowed to have heterogenous priors. An equilibrium of a complete information game is robust to incomplete information under non-common priors if for every incomplete information game where each player's prior assigns high probability on the event that the players know at arbitrarily high order that the payoffs are given by the complete information game, there exists a Bayesian Nash equilibrium that generates behavior close to the equilibrium in consideration. It is shown that for generic games, an equilibrium is robust under non-common priors if and only if it is the unique rationalizable action profile. Set-valued concepts are also introduced, and for generic games, a smallest robust set is shown to exist and coincide with the set of a posteriori equilibria.

Keywords: incomplete information; robustness; common prior assumption; higher order belief (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2005-12-31
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/14287/1/MPRA_paper_14287.pdf original version (application/pdf)

Related works:
Journal Article: Robust equilibria under non-common priors (2010)
Working Paper: Robust equilibria under non-common priors (2010)
Working Paper: Robust equilibria under non-common priors (2010)
Working Paper: Robust Equilibria under Non-Common Priors (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:14287

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().