Cognitive Empathy in Conflict Situations
28 Pages Posted: 15 Jan 2016 Last revised: 18 Sep 2017
Date Written: September 18, 2017
Two individuals are involved in a conflict situation in which preferences are ex-ante uncertain. While they eventually learn their own preferences, they have to pay a small cost if they want to secretely learn their opponent’s preferences. We show that there is an interval with upper bound less than one and lower bound greater than zero such that, for sufficiently small positive costs of information acquisition, in any Bayesian Nash equilibrium of the resulting game of incomplete information the probability of getting informed about the opponent’s preferences is within this interval.
Keywords: Incomplete Information, Information Acquisition, Theory of Mind, Conflict, Imperfect Empathy
JEL Classification: C72, C73, D03, D74, D82, D83
Suggested Citation: Suggested Citation