Template-Type: ReDIF-Paper 1.0
Author-Name: Giacomo Bonanno
Author-Name-First: Giacomo
Author-Name-Last: Bonanno
Author-Workplace-Name: Department of Economics, University of California Davis
Title: A characterization of sequential equilibrium in terms of AGM belief revision
Abstract: In [G. Bonanno, Rational choice and AGM belief revision, Artificial Intelligence, 2009] a semantics for one-stage AGM belief revision was proposed based on choice frames, borrowed from the rational choice literature. In this paper we extend the semantics of choice frames to deal with iterated belief revision and use the corresponding structures to analyze extensive-form games. Choice frames can be used to represent a player's initial beliefs and disposition to change those beliefs when informed that it is her turn to move. If the frame satisfies AGM-consistency and a natural postulate for iterated belief revision, then it is rationalizable by a total pre-order on the set of histories. We show that three properties of this total pre-order, together with the hypothesis of agreement among players, provide a characterization of the notion of consistent assessment, which is the central component of the notion of sequential equilibrium proposed by Kreps and Wilson [Econometrica, 1982].
Length: 28
File-URL: https://repec.dss.ucdavis.edu/files/4q8KXxTuvi8g8CsvNYzj3gxQ/09-14.pdf
File-Format: application/pdf
Number: 33
Classification-JEL: C7
KeyWords: Choice function, AGM belief revision, extensive-form game, sequential equilibrium, iterated belief revision, backward induction.
Creation-Date: 20091012
Handle: RePEc:cda:wpaper:33