Hellman, Z. and Levy, Y. J. (2017) Bayesian games with a continuum of states. Theoretical Economics, 12(3), pp. 1089-1120. (doi: 10.3982/TE1544)
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Abstract
We show that every Bayesian game with purely atomic types has a measurable Bayesian equilibrium when the common knowl- edge relation is smooth. Conversely, for any common knowledge rela- tion that is not smooth, there exists a type space that yields this common knowledge relation and payoffs such that the resulting Bayesian game will not have any Bayesian equilibrium. We show that our smoothness condition also rules out two paradoxes involving Bayesian games with a continuum of types: the impossibility of having a common prior on components when a common prior over the entire state space exists, and the possibility of interim betting/trade even when no such trade can be supported ex ante.
Item Type: | Articles |
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Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | Levy, Dr John |
Authors: | Hellman, Z., and Levy, Y. J. |
College/School: | College of Social Sciences > Adam Smith Business School > Economics |
Journal Name: | Theoretical Economics |
Publisher: | Econometric Society |
ISSN: | 1933-6837 |
ISSN (Online): | 1555-7561 |
Published Online: | 22 September 2017 |
Copyright Holders: | Copyright © 2017 The Authors |
First Published: | First published in Theoretical Economics 12(3): 1089-1120 |
Publisher Policy: | Reproduced under a Creative Commons License |
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