TY - UNPB

T1 - Beliefs in Network Games (Revised version of CentER DP 2007-46)

AU - Kets, W.

N1 - Pagination: 48

PY - 2008

Y1 - 2008

N2 - Networks can have an important effect on economic outcomes. Given the complexity of many of these networks, agents will generally not know their structure. We study the sensitivity of game-theoretic predictions to the specification of players’ (common) prior on the network in a setting where players play a fixed game with their neighbors and only have local information on the network structure. We show that two priors are close in a strategic sense if and only if (i) the priors assign similar probabilities to all events that involve a player and his neighbors, and (ii) with high probability, a player believes, given his type, that his neighbors’ conditional beliefs are close under the two priors, and that his neighbors believe, given their type, that. . . the conditional beliefs of their neighbors are close, for any number of iterations.

AB - Networks can have an important effect on economic outcomes. Given the complexity of many of these networks, agents will generally not know their structure. We study the sensitivity of game-theoretic predictions to the specification of players’ (common) prior on the network in a setting where players play a fixed game with their neighbors and only have local information on the network structure. We show that two priors are close in a strategic sense if and only if (i) the priors assign similar probabilities to all events that involve a player and his neighbors, and (ii) with high probability, a player believes, given his type, that his neighbors’ conditional beliefs are close under the two priors, and that his neighbors believe, given their type, that. . . the conditional beliefs of their neighbors are close, for any number of iterations.

KW - Network games

KW - incomplete information

KW - higher order beliefs

KW - continuity

KW - random networks

KW - population uncertainty

M3 - Discussion paper

VL - 2008-5

T3 - CentER Discussion Paper

BT - Beliefs in Network Games (Revised version of CentER DP 2007-46)

PB - Microeconomics

CY - Tilburg

ER -