Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/59688
Authors: 
Cianciaruso, Davide
Germano, Fabrizio
Year of Publication: 
2011
Series/Report no.: 
Discussion Paper, Center for Mathematical Studies in Economics and Management Science 1539
Abstract: 
By identifying types whose low-order beliefs - up to level li - about the state of nature coincide, we obtain quotient type spaces that are typically smaller than the original ones, preserve basic topological properties, and allow standard equilibrium analysis even under bounded reasoning. Our Bayesian Nash (li, l-i)-equilibria capture players' inability to distinguish types belonging to the same equivalence class. The case with uncertainty about the vector of levels (li, l-i) is also analyzed. Two examples illustrate the constructions.
Subjects: 
incomplete-information games
high-order reasoning
type space
quotient space
hierarchies of beliefs
bounded rationality
JEL: 
C72
D03
D83
Document Type: 
Working Paper

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