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 -