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Licensed Unlicensed Requires Authentication Published by De Gruyter March 6, 2011

Interactive Epistemology and Solution Concepts for Games with Asymmetric Information

  • Pierpaolo Battigalli , Alfredo Di Tillio , Edoardo Grillo and Antonio Penta

We use an interactive epistemology framework to provide a systematic analysis of some solution concepts for games with asymmetric information. We characterize solution concepts using expressible epistemic assumptions, represented as events in the canonical space generated by primitive uncertainty about the payoff relevant state, payoff irrelevant information, and actions. In most of the paper, we adopt an interim perspective, which is appropriate to analyze genuine incomplete information. We relate Delta-rationalizability (Battigalli and Siniscalchi, Advances in Theoretical Economics 3, 2003) to interim correlated rationalizability (Dekel, Fudenberg and Morris, Theoretical Economics 2, 2007) and to rationalizability in the interim strategic form. We also consider the ex ante perspective, which is appropriate to analyze asymmetric information about an initial chance move. We prove the equivalence between interim correlated rationalizability and an ex ante notion of correlated rationalizability.

Published Online: 2011-3-6

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

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