On the strategic impact of an event under non-common priors

B-Tier
Journal: Games and Economic Behavior
Year: 2012
Volume: 74
Issue: 1
Pages: 321-331

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper studies the impact of a small probability event on strategic behavior in incomplete information games with non-common priors. It is shown that the global impact of a small probability event (i.e., its propensity to affect strategic behavior at all states in the state space) has an upper bound that is an increasing function of a measure of discrepancy from the common prior assumption. In particular, its global impact can be arbitrarily large under non-common priors, but is bounded from above under common priors. These results quantify the different implications common prior and non-common prior models have on the (infinite) hierarchies of beliefs.

Technical Details

RePEc Handle
repec:eee:gamebe:v:74:y:2012:i:1:p:321-331
Journal Field
Theory
Author Count
2
Added to Database
2026-01-26