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http://ssrn.com/abstract=1729280
 
 

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Interdependent Preferences and Strategic Distinguishability


Dirk Bergemann


Yale University - Cowles Foundation - Department of Economics

Stephen Morris


Princeton University - Department of Economics

Satoru Takahashi


National University of Singapore (NUS) - Department of Economics

August 25, 2016

Economic Theory Center Working Paper No. 008-2014

Abstract:     
We study agents whose expected utility preferences are interdependent for informational or psychological reasons. We characterize when two types can be strategically distinguished in the sense that they are guaranteed to behave differently in some finite mechanism. We show that two types are strategically distinguishable if and only if they have different hierarchies of interdependent preferences. The same characterization applies for rationalizability, equilibrium, and any interim solution concept in between. Our results generalize and unify results of Abreu and Matsushima (1992), who characterize strategic distinguishability on fixed finite type spaces, and Dekel, Fudenberg, and Morris (2006), (2007), who characterize strategic distinguishability without interdependent preferences.

Number of Pages in PDF File: 54

Keywords: Interdependent Preferences, Higher Order Preferences, Hierarchy of Preferences, Strategic Distinguishability

JEL Classification: C79, D82, D83


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Date posted: December 22, 2010 ; Last revised: August 26, 2016

Suggested Citation

Bergemann, Dirk and Morris, Stephen and Takahashi, Satoru, Interdependent Preferences and Strategic Distinguishability (August 25, 2016). Economic Theory Center Working Paper No. 008-2014. Available at SSRN: http://ssrn.com/abstract=1729280 or http://dx.doi.org/10.2139/ssrn.1729280

Contact Information

Dirk Bergemann (Contact Author)
Yale University - Cowles Foundation - Department of Economics ( email )
28 Hillhouse Ave
New Haven, CT 06520-8268
United States
203-432-3592 (Phone)
203-432-2128 (Fax)
HOME PAGE: http://www.econ.yale.edu/~dirk/
Stephen Edward Morris
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States

Satoru Takahashi
National University of Singapore (NUS) - Department of Economics ( email )
1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore
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