Epistemic Conditions for Agreement and Stochastic Independence of epsilon-Contaminated Beliefs

Kin Chung Lo

Working Papers from York University, Department of Economics

Abstract: This paper studies strategic games in which the beliefs of each player are represented by a set of probability measures satisfying a parametric specialization that is called epsilon-contamination. That is, beliefs are represented by a set of probability measures, where every measure in the set has the form (1 - epsilon)P*+epsilon.p, p*being the benchmark probability measure, p being contamination,and epsilon reflecting the amount of error in p* that is deemed possible. Under a suitably modified common prior assumption, if beliefs about opponents' action choices are common knowlegdge, then beliefs satisfy some properties that can be interpreted as agreement and stochastic independence.

JEL-codes: C72 D81 (search for similar items in EconPapers)
Pages: 27 pages
Date: 1998-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://dept.econ.yorku.ca/research/workingPapers/working_papers/contam4.pdf First version, 1998

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Persistent link: https://EconPapers.repec.org/RePEc:yca:wpaper:1998_02

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