Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/244608 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 340
Publisher: 
University of California, Department of Economics, Davis, CA
Abstract: 
Equilibrium notions for games with unawareness in the literature cannot be interpreted as steady-states of a learning process because players may discover novel actions during play. In this sense, many games with unawareness are ''self-destroying'' as a player's representation of the game may change after playing it once. We define discovery processes where at each state there is an extensive-form game with unawareness that together with the players' play determines the transition to possibly another extensive-form game with unawareness in which players are now aware of actions that they have discovered. A discovery process is rationalizable if players play extensive-form rationalizable strategies in each game with unawareness. We show that for any game with unawareness there is a rationalizable discovery process that leads to a self-confirming game that possesses a self-confirming equilibrium in extensive-form rationalizable strategies. This notion of equilibrium can be interpreted as steady-state of both a discovery and learning process.
Subjects: 
Self-confirming equilibrium
conjectural equilibrium
extensive-form rationalizability
unawareness
extensive-form games
equilibrium
learning
discovery
JEL: 
C72
D83
Document Type: 
Working Paper

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