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From posteriors to priors via cycles
Authors:José Alvaro Rodrigues-Neto
Institution:Australian National University, School of Economics, College of Business and Economics, H.W. Arndt Building 25A, Canberra, ACT 0200, Australia
Abstract:We present new necessary and sufficient conditions for checking if a set of players' posteriors may come from a common prior. A simple diagrammatic device calculates the join and meet of players' knowledge partitions. Each cycle in the diagram has a corresponding cycle equation. Posteriors are consistent with a common prior if and only if all cycle equations are satisfied. We prove that in games of two players, where the join partition has only singletons, a common prior exists if each player's distribution of beliefs over the elements of her opponent's partition is independent of her own private information.
Keywords:D82  D83
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