Unawareness, Beliefs, and Speculative Trade

Aviad Heifetz, Martin Meier, Burkhard Schipper

Research output: Contribution to journalArticlepeer-review

39 Citations (SciVal)


We define a generalized state-space model with interactive unawareness and probabilistic beliefs. Such models are desirable for potential applications of asymmetric unawareness. Applying our unawareness belief structures, we show that the common prior assumption is too weak to rule out speculative trade in all states. Yet, we prove a generalized “No-speculative-trade” theorem according to which there cannot be common certainty of strict preference to trade. Moreover, we prove a generalization of the “No-agreeing-to-disagree” theorem.
Original languageEnglish
Pages (from-to)101-121
JournalGames and Economic Behavior
Issue number1
Publication statusPublished - 2 Oct 2012


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