Bayesian Games with Unawareness and Unawareness Perfection

Martin Meier, Burkhard Schipper

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

Applying unawareness belief structures introduced in Heifetz et al. (Games Econ Behav 77:100–121, 2013a), we develop Bayesian games with unawareness, define equilibrium, and prove existence. We show how equilibria are extended naturally from lower to higher awareness levels and restricted from higher to lower awareness levels. We apply Bayesian games with unawareness to investigate the robustness of equilibria to uncertainty about opponents’ awareness of actions. We show that a Nash equilibrium of a strategic game is robust to unawareness of actions if and only if it is not weakly dominated. Finally, we discuss the relationship between standard Bayesian games and Bayesian games with unawareness.
Original languageEnglish
Pages (from-to)219-249
Number of pages31
JournalEconomic Theory
Volume56
Issue number2
Early online date20 Dec 2013
DOIs
Publication statusPublished - 1 Jun 2014

Cite this

Bayesian Games with Unawareness and Unawareness Perfection. / Meier, Martin; Schipper, Burkhard.

In: Economic Theory, Vol. 56, No. 2, 01.06.2014, p. 219-249.

Research output: Contribution to journalArticle

Meier, Martin ; Schipper, Burkhard. / Bayesian Games with Unawareness and Unawareness Perfection. In: Economic Theory. 2014 ; Vol. 56, No. 2. pp. 219-249.
@article{cfb780921ab6414d8e6141f9bc06b85e,
title = "Bayesian Games with Unawareness and Unawareness Perfection",
abstract = "Applying unawareness belief structures introduced in Heifetz et al. (Games Econ Behav 77:100–121, 2013a), we develop Bayesian games with unawareness, define equilibrium, and prove existence. We show how equilibria are extended naturally from lower to higher awareness levels and restricted from higher to lower awareness levels. We apply Bayesian games with unawareness to investigate the robustness of equilibria to uncertainty about opponents’ awareness of actions. We show that a Nash equilibrium of a strategic game is robust to unawareness of actions if and only if it is not weakly dominated. Finally, we discuss the relationship between standard Bayesian games and Bayesian games with unawareness.",
author = "Martin Meier and Burkhard Schipper",
year = "2014",
month = "6",
day = "1",
doi = "10.1007/s00199-013-0788-5",
language = "English",
volume = "56",
pages = "219--249",
journal = "Economic Theory",
issn = "0938-2259",
publisher = "Springer New York",
number = "2",

}

TY - JOUR

T1 - Bayesian Games with Unawareness and Unawareness Perfection

AU - Meier, Martin

AU - Schipper, Burkhard

PY - 2014/6/1

Y1 - 2014/6/1

N2 - Applying unawareness belief structures introduced in Heifetz et al. (Games Econ Behav 77:100–121, 2013a), we develop Bayesian games with unawareness, define equilibrium, and prove existence. We show how equilibria are extended naturally from lower to higher awareness levels and restricted from higher to lower awareness levels. We apply Bayesian games with unawareness to investigate the robustness of equilibria to uncertainty about opponents’ awareness of actions. We show that a Nash equilibrium of a strategic game is robust to unawareness of actions if and only if it is not weakly dominated. Finally, we discuss the relationship between standard Bayesian games and Bayesian games with unawareness.

AB - Applying unawareness belief structures introduced in Heifetz et al. (Games Econ Behav 77:100–121, 2013a), we develop Bayesian games with unawareness, define equilibrium, and prove existence. We show how equilibria are extended naturally from lower to higher awareness levels and restricted from higher to lower awareness levels. We apply Bayesian games with unawareness to investigate the robustness of equilibria to uncertainty about opponents’ awareness of actions. We show that a Nash equilibrium of a strategic game is robust to unawareness of actions if and only if it is not weakly dominated. Finally, we discuss the relationship between standard Bayesian games and Bayesian games with unawareness.

U2 - 10.1007/s00199-013-0788-5

DO - 10.1007/s00199-013-0788-5

M3 - Article

VL - 56

SP - 219

EP - 249

JO - Economic Theory

JF - Economic Theory

SN - 0938-2259

IS - 2

ER -