Strong Belief and Forward Induction Reasoning |
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Authors: | Pierpaolo BattigalliMarciano Siniscalchi |
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Institution: | a Istituto di Economia Politica, Università Bocconi, 20136, Milano, Italyf1pierpaolo.battigalli@uni-bocconi.itf1b Department of Economics, Princeton University, Princeton, New Jersey, 08544-1021, f2marciano@princeton.eduf2 |
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Abstract: | We provide a unified epistemic analysis of some forward-induction solution concepts in games with complete and incomplete information. We suggest that forward induction reasoning may be usefully interpreted as a set of assumptions governing the players' belief revision processes, and define a notion of strong belief to formalize these assumptions. Building on the notion of strong belief, we provide an epistemic characterization of extensive-form rationalizability and the intuitive criterion, as well as sufficient epistemic conditions for the backward induction outcome in generic games with perfect information. Journal of Economic Literature Classification Numbers: C72, D82. |
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Keywords: | conditional belief strong belief forward induction rationalizability intuitive criterion |
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