On Defining Ex Ante Payoffs in Games with Diffuse Prior

19 Pages Posted: 3 May 2017 Last revised: 9 May 2017

Attila Ambrus

Duke University - Department of Economics

Aaron Kolb

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

Date Written: May 2, 2017

Abstract

We formalize the notion of a diffuse prior and show that, for a general class of games, strategies which admit well-defined expected payoffs under the diffuse prior satisfy a stationarity property. We define the diffuse prior through a limit construction, using sequences of well-defined priors that become increasingly dispersed and uniform. Admissible strategies are those for which ex ante payoffs along these sequences converge to a limit that does not depend on the particular sequence of priors. We show that a strategy is admissible if and only if it is almost stationary in a precise sense. 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 (May 2, 2017). 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/

Paper statistics

Downloads
16
Abstract Views
53