Template-Type: ReDIF-Paper 1.0
Author-Name: Burkhard C. Schipper
Author-Name-First: Burkhard C.
Author-Name-Last: Schipper
Author-Name: Martin Meier
Author-Name-First: Martin
Author-Name-Last: Meier
Author-Name: Aviad Heifetz
Author-Name-First: Aviad
Author-Name-Last: Heifetz
Author-Workplace-Name: Department of Economics, University of California Davis
Title: Prudent Rationalizability in Generalized Extensive-Form Games with Unawareness
Abstract: We define a cautious version of extensive-form rationalizability for generalized extensive-form games with unawareness that we call prudent rationalizability. It is an extensive-form analogue of iterated admissibility. In each round of the procedure, for each tree and each information set of a player a surviving strategy of hers is required to be rational vis-a-vis a belief system with a full-support belief on the opponents' previously surviving strategies that reach that information set. We demonstrate the applicability of prudent rationalizability. In games of disclosure of verifiable information, we show that prudent rationalizability yields unraveling under full awareness but unraveling might fail under unawareness. We compare prudent rationalizability to extensive-form rationalizability. We show that prudent rationalizability may not refine extensive-form rationalizability strategies but conjecture that the paths induced by prudent rationalizable strategy profiles (weakly) refine the set of paths induced by extensive-form rationalizable strategies.
Length: 30
File-URL: https://repec.dss.ucdavis.edu/files/FvTJ2QuiUpSkvBuXMonVxQDu/prudrat20190617.pdf
File-Format: application/pdf
Number: 332
Classification-JEL: C72, D83
KeyWords: Caution, extensive-form rationalizability, unawareness, disclosure, verifiable information, persuasion games, iterated admissibility, common strong cautious belief in rationality
Creation-Date: 20190828
Handle: RePEc:cda:wpaper:332