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Full-Text Articles in Social and Behavioral Sciences
Informational Robustness And Solution Concepts, Dirk Bergemann, Stephen Morris
Informational Robustness And Solution Concepts, Dirk Bergemann, Stephen Morris
Cowles Foundation Discussion Papers
Consider the following “informational robustness” question: what can we say about the set of outcomes that may arise in equilibrium of a Bayesian game if players may observe some additional information? This set of outcomes will correspond to a solution concept that is weaker than equilibrium, with the solution concept depending on what restrictions are imposed on the additional information. We describe a unified approach encompassing prior informational robustness results, as well as identifying the solution concept that corresponds to no restrictions on the additional information; this version of rationalizability depends only on the support of players’ beliefs and implies …
Informational Robustness And Solution Concepts, Dirk Bergemann, Stephen Morris
Informational Robustness And Solution Concepts, Dirk Bergemann, Stephen Morris
Cowles Foundation Discussion Papers
We discuss four solution concepts for games with incomplete information. We show how each solution concept can be viewed as encoding informational robustness. For a given type space, we consider expansions of the type space that provide players with additional signals. We distinguish between expansions along two dimensions. First, the signals can either convey payoff relevant information or only payoff irrelevant information. Second, the signals can be generated from a common (prior) distribution or not. We establish the equivalence between Bayes Nash equilibrium behavior under the resulting expansion of the type space and a corresponding more permissive solution concept under …