The Logic of Knightian Games

Abstract

We devise a sound and complete epistemic-logic axiomatization for Knightian type spaces - the generalization of Harsanyi type spaces employed in strategic games with asymmetric uncertainty/ambiguity. In a Knightian type space, each type's epistemic attitude is represented by a set of probability measures. The axiomatization unravels how each such epistemic attitude embodies a (potentially) partial likelihood relation over formulas, and conversely, each partial likelihood relation over formulas is representable by a Knightian type.

Keywords: Knightian uncertainty, type spaces, epistemic logic

JEL Classification: D81, D82, D83