Pairwise epistemic conditions for Nash equilibrium

C.W. Bach, E. Tsakas*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We introduce a framework for modeling pairwise interactive beliefs and provide an epistemic foundation for Nash equilibrium in terms of pairwise epistemic conditions locally imposed on only some pairs of players. Our main result considerably weakens not only the standard sufficient conditions by Aumann and Brandenburger (1995), but also the subsequent generalization by Barelli (2009). Surprisingly, our conditions do not require nor imply mutual belief in rationality.
Original languageEnglish
Pages (from-to)48-59
Number of pages12
JournalGames and Economic Behavior
Volume85
DOIs
Publication statusPublished - May 2014

Keywords

  • Nash equilibrium
  • Pairwise common belief
  • Pairwise mutual belief
  • Pairwise action-consistency
  • Rationality
  • Conjectures
  • Biconnected graph
  • Epistemic game theory
  • KNOWLEDGE

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