Autore
Battigalli, Pierpaolo

Titolo
Rationalizability in incomplete information games
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1999 - Fascicolo: 17 - Pagina iniziale: 1 - Pagina finale: 63

We argue that thè rationalizability approach is particularly appropriate to analyze games with genuine incomplete inforrna-tion. We define two nested iterative solution procedures, which do not rely on thè specification of a type space a la Harsanyi. Weak rationalizability is characterized by common certainty of ra-tionality at thè beginning of thè game. Strong rationalizability incorporates a notion of forward iriduction. The solutions may take as given some extraneous restrictions on plavers' conditional beliefs. In dynamic games, strong rationalizability is a refinement of weak rationalizability. Existence, regularity properties, equiv-alence with thè set of perfect Bayesian equilibrium outcomes and thè set of iteratively interini undorninated strategies are proved under standard assumptions. The approach is illustrateci by some applications to economie models including reputation, disclosure and signaling.



Testo completo: http://www.iue.it/ECO/WP-Texts/ECO99-17.pdf

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