Admissibility and Common Knowledge

27 Pages Posted: 8 Jan 1997

See all articles by Geir B. Asheim

Geir B. Asheim

University of Oslo - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: January 1996

Abstract

The implications of assuming that it is commonly known that players consider only admissible best responses are investigated. Within a states-of-the-world model where a state, for each player, determines a strategy set rather than a strategy the concept of fully permissible sets is defined. General existence is established, and a finite algorithm (eliminating strategy sets instead of strategies) is provided. The concept refines rationalizability as well as the Dekel-Fudenberg procedure, and captures a notion of forward induction. When players consider all best responses, the same framework can be used to define the concept of rationalizable sets, which characterizes rationalizability.

JEL Classification: C70

Suggested Citation

Asheim, Geir B., Admissibility and Common Knowledge (January 1996). Available at SSRN: https://ssrn.com/abstract=1186 or http://dx.doi.org/10.2139/ssrn.1186

Geir B. Asheim (Contact Author)

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway
+47-2285 5498 (Phone)
+47-2285 5035 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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