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Backward Induction without Common Knowledge

Published online by Cambridge University Press:  28 February 2022

Cristina Bicchieri
Cristina Bicchieri*
Affiliation:
Carnegie-Mellon University
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Extract

Game theory studies the behavior of rational players in interactive situations and its possible outcomes. For such an investigation, the notion of players’ rationality is crucial. While notions of rationality have been extensively discussed in game theory, the epistemic conditions under which a game is played — though implicitly presumed — have seldom been explicitly analyzed and formalized. These conditions involve the players’ reasoning processes and capabilities, as well as their knowledge of the game situation. Game theory treats some aspects of information about chance moves and other players’ moves by means of information partitions in extensive form games. But a player's knowledge of the structure, for example, of information partitions themselves is different from his information about chance moves and other players’ moves. The informational aspects captured by the extensive form games have nothing to do with a player's knowledge of the structure of the game.

Type
Part XI. Decision and Game Theory
Information
PSA: Proceedings of the Biennial Meeting of the Philosophy of Science Association , Volume 1988 , Issue 2: Volume Two: Symposia and Invited Papers 1988 , 1988 , pp. 329 - 343
Copyright
Copyright © 1989 by the Philosophy of Science Association

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