Consistency of beliefs and epistemic conditions for Nash and correlated equilibria |
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Authors: | Paulo Barelli |
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Institution: | aDepartment of Economics, University of Rochester, Rochester, NY 14627, USA;bIbmec, São Paulo, Brazil |
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Abstract: | A consistency condition (action-consistency) on the interim beliefs of players in a game is introduced. Action-consistency is weaker than common priors and, unlike common priors, is characterized by a “no-bets” condition on verifiable events. Using action-consistency, we provide epistemic conditions to Nash and correlated equilibria weakening the common knowledge restrictions in Aumann and Brandenburger Aumann, R., Brandenburger, A., 1995. Epistemic conditions for Nash equilibrium. Econometrica 63, 1161–1180] and Aumann Aumann, R., 1987. Correlated equilibrium as an expression of Bayesian rationality. Econometrica 55, 1–18]. |
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Keywords: | Common prior assumption Universal beliefs space Epistemic conditions for equilibria Common knowledge |
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