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Uncertain rationality, depth of reasoning and robustness in games with incomplete information

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dc.contributor.author Germano, Fabrizio
dc.contributor.author Weinstein, Jonathan
dc.contributor.author Zuazo-Garin, Peio
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.accessioned 2018-02-14T15:30:07Z
dc.date.available 2018-02-14T15:30:07Z
dc.date.issued 2016-12-16
dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1548
dc.identifier.uri http://hdl.handle.net/10230/27992
dc.description.abstract Predictions under common knowledge of payoffs may differ from those under arbitrarily, but finitely, many orders of mutual knowledge; Rubinstein's (1989) Email game is a seminal example. Weinstein and Yildiz (2007) showed that the discontinuity in the example generalizes: for all types with multiple rationalizable (ICR) actions, there exist similar types with unique rationalizable action. This paper studies how a wide class of departures from common belief in rationality impact Weinstein and Yildiz's discontinuity. We weaken ICR to ICR-x, where x is a sequence whose n-th term is the probability players attach to (n - 1)th-order belief in rationality. We find that Weinstein and Yildiz's discontinuity holds when higher-order belief in rationality remains above some threshold (constant x), but fails when higher-order belief in rationality eventually becomes low enough (x converging to 0).
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 1548
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title Uncertain rationality, depth of reasoning and robustness in games with incomplete information
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2017-07-23T02:17:58Z
dc.subject.keyword robustness
dc.subject.keyword rationalizability
dc.subject.keyword bounded rationality
dc.subject.keyword incomplete information
dc.subject.keyword belief hierarchies
dc.subject.keyword Microeconomics
dc.rights.accessRights info:eu-repo/semantics/openAccess


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