On Defining Ex Ante Payoffs in Games with Diffuse Prior

27 Pages Posted: 3 May 2017 Last revised: 5 Apr 2018

Attila Ambrus

Duke University - Department of Economics

Aaron Kolb

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

Date Written: March 31, 2018

Abstract

We formalize the notion of a diffuse prior and show that, in stationary games, strategies which admit well-defined expected payoffs under the diffuse prior are essentially stationary. We define the diffuse prior through a limit construction, using sequences of well-defined priors that become increasingly dispersed. Admissible strategies are those for which ex ante payoffs along these sequences converge to a limit that does not depend on the particular sequence. A secondary contribution of the paper is a generalization of the concept of distributional strategies (Milgrom and Weber, 1985) to multistage games.

Suggested Citation

Ambrus, Attila and Kolb, Aaron, On Defining Ex Ante Payoffs in Games with Diffuse Prior (March 31, 2018). Economic Research Initiatives at Duke (ERID) Working Paper No. 246. Available at SSRN: https://ssrn.com/abstract=2962424 or http://dx.doi.org/10.2139/ssrn.2962424

Attila Ambrus (Contact Author)

Duke University - Department of Economics ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Aaron Kolb

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States

HOME PAGE: http://https://sites.google.com/site/aaronmkolb/

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