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An Epistemic Characterization of Extensive Form RationalizabilityPierpaolo BattigalliUniversity of Bocconi - Innocenzo Gasparini Institute for Economic Research (IGIER) - Department of Economics (DEP); Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) Marciano SiniscalchiNorthwestern University - Department of Economics August 1997 Fondazione Eni Enrico Mattei (FEEM), Working Paper No. 25.99 Abstract: We use an extensive form, universal type space to provide the following epistemic characterisation of extensive form rationalisability. Say that player i strongly believes event E if i is certain of E conditional on each of her information sets consistent with E. Our main contribution is to show that a strategy profile s is extensive form rationalisable if and only if there is a state in which s is played and (0) everybody is rational, (1) everybody strongly believes (0), (2) everybody strongly believes (0) & (1), (3) everybody strongly believes (0) & (1) & (2), .... This result also allows us to provide sufficient epistemic conditions for the backward induction outcome and to relate extensive form rationalisability and conditional common certainty of rationality.
Number of Pages in PDF File: 31 JEL Classification: C70 working papers seriesDate posted: May 20, 1999Suggested CitationContact Information
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