How to make sense of the common prior assumption under incomplete information | Zendy

Giacomo Bonanno | Zendy; Klaus Nehring | Zendy

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How to make sense of the common prior assumption under incomplete information

Author(s) -

Giacomo Bonanno,

Klaus Nehring

Publication year - 1999

Publication title -

international journal of game theory

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.461

H-Index - 44

eISSN - 1432-1270

pISSN - 0020-7276

DOI - 10.1007/s001820050117

Subject(s) - generalization , recall , complete information , mathematical economics , bayesian probability , key (lock) , computer science , belief revision , epistemology , mathematics , psychology , cognitive psychology , artificial intelligence , philosophy , computer security

. Recent contributions have questioned the meaningfulness of the Common Prior Assumption (CPA) in situations of incomplete information. We characterize the CPA in terms of the primitives (individuals' belief hierarchies) without reference to an ex ante stage. The key is to rule out “agreeing to disagree” about any aspect of beliefs. Our results also yield a generalization of single-person Bayesian updating to situations without perfect recall. The entire analysis is carried out locally at the “true state”, using beliefs only, rather than beliefs-plus-knowledge. We discuss the role of truth assumptions on beliefs for a satisfactory notion of the CPA, and point out an important conceptual discontinuity between the case of two and many individuals.

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