Interdependent Preferences and Strategic Distinguishability

45 Pages Posted: 30 Sep 2010

See all articles by Dirk Bergemann

Dirk Bergemann

Yale University - Cowles Foundation - Department of Economics; Yale University - Cowles Foundation

Stephen Morris

Princeton University - Department of Economics

Satoru Takahashi

Harvard University - Department of Economics

Multiple version iconThere are 5 versions of this paper

Date Written: September 29, 2010

Abstract

A universal type space of interdependent expected utility preference types is constructed from higher-order preference hierarchies describing (i) an agent's (unconditional) preferences over a lottery space; (ii) the agent's preference over Anscombe-Aumann acts conditional on the unconditional preferences; and so on.

Two types are said to be strategically indistinguishable if they have an equilibrium action in common in any mechanism that they play. We show that two types are strategically indistinguishable if and only if they have the same preference hierarchy. We examine how this result extends to alternative solution concepts and strategic relations between types.

Keywords: Interdependent Preferences, Higher-Order Preference Hierarchy, Universal Type Space, Strategic Distinguishability

JEL Classification: C79, D82, D83

Suggested Citation

Bergemann, Dirk and Morris, Stephen Edward and Takahashi, Satoru, Interdependent Preferences and Strategic Distinguishability (September 29, 2010). Cowles Foundation Discussion Paper No. 1772. Available at SSRN: https://ssrn.com/abstract=1684570 or http://dx.doi.org/10.2139/ssrn.1684570

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/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Stephen Edward Morris

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

Satoru Takahashi

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
99
rank
53,668
Abstract Views
967
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information