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Minelli, Enrico
Polemarchakis, H.
Year of Publication: 
Series/Report no.: 
Working Paper, Brown University, Department of Economics 2001-27
In a game with rational expectations, individuals simultaneously refine their information with the information revealed by the strategies of other individuals. At a Nash equilibrium of a game with rational expectations, the information of individuals is essentially symmetric: the same profile of strategies is also an equilibrium of a game with symmetric information; and strategies are common knowledge. If each player has a veto act, which yields a minimum payoff that no other profile of strategies attains, then the veto profile is the only Nash equilibrium, and it is an equilibrium with rational expectations and essentially symmetric information; which accounts for the impossibility of speculation.
Nash equilibrium
rational expectations
common knowledge
Document Type: 
Working Paper

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