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Inferring Beliefs from Actions

25 Pages Posted: 29 Jan 2013 Last revised: 21 Feb 2017

Itai Arieli

Technion-Israel Institute of Technology

Manuel Mueller-Frank

University of Navarra, IESE Business School

Date Written: August 15, 2016

Abstract

We address the question to which degree the private information of a decision maker is revealed through his action, in an environment with compact metrizable state and action space. We show that the decision maker's optimal action reveals his posterior distribution for a generic set of continuous utility functions if and only if the set of actions contains no isolated points. We apply the generic result to fully strategic, repeated interaction in social networks without payoff externalities. We establish that if the action set contains no isolated points, then perfect information aggregation holds in equilibrium for generic continuous utility functions, in any strongly connected social network.

Keywords: Belief Revelation; Information Aggregation; Learning; Scoring Rules

JEL Classification: D80, D83, D85, G11

Suggested Citation

Arieli, Itai and Mueller-Frank, Manuel, Inferring Beliefs from Actions (August 15, 2016). Available at SSRN: https://ssrn.com/abstract=2208083 or http://dx.doi.org/10.2139/ssrn.2208083

Itai Arieli

Technion-Israel Institute of Technology ( email )

Technion City
Haifa 32000, Haifa 32000
Israel

Manuel Mueller-Frank (Contact Author)

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

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