TY - JOUR
T1 - Unawareness, beliefs, and speculative trade
AU - Heifetz, Aviad
AU - Meier, Martin
AU - Schipper, Burkhard C.
N1 - Funding Information: ✩ Aviad acknowledges support from the Open University of Israel, Research Grant No. 46106. Martin acknowledges financial support from the Spanish Ministerio de Educación y Ciencia via a Ramon y Cajal Fellowship and under grant ECO2009-12695 as well as from the Fundación Ramón Areces. Burkhard received financial support from the NSF SES-0647811, DFG SFB/TR 15, Minerva Stiftung, and IGA-UCD. We thank two anonymous referees, Leandro Chaves Rêgo, Eddie Dekel, Enrique Kawamura, Li Jing, Salvatore Modica, Klaus Nehring and participants in the Workshop on Unawareness at Stanford University, 2006, NASEM 2006, LOFT 2006, LAMES 2006, SAET 2007, TARK 2007, Stony Brook 2007, ESEM 2007, NBER GE conference 2007, GAMES 2008, and seminars at Bocconi, Max-Planck Institute of Mathematics in the Sciences in Leipzig, UCLA, St. Louis, Tucson, and Venice for helpful comments. Some of the material was circulated previously as a working paper titled “Unawareness, beliefs and games”. Some of the material circulated in earlier versions of the paper is now contained in Meier and Schipper (2012a) and Heifetz et al. (2011b). * Corresponding author. E-mail addresses: [email protected] (A. Heifetz), [email protected] (M. Meier), [email protected] (B.C. Schipper).
PY - 2013/1
Y1 - 2013/1
N2 - We define a generalized state-space model with interactive unawareness and probabilistic beliefs. Such models are desirable for potential applications of asymmetric unawareness. Applying our unawareness belief structures, we show that the common prior assumption is too weak to rule out speculative trade in all states. Yet, we prove a generalized "No-speculative-trade" theorem according to which there cannot be common certainty of strict preference to trade. Moreover, we prove a generalization of the "No-agreeing-to-disagree" theorem.
AB - We define a generalized state-space model with interactive unawareness and probabilistic beliefs. Such models are desirable for potential applications of asymmetric unawareness. Applying our unawareness belief structures, we show that the common prior assumption is too weak to rule out speculative trade in all states. Yet, we prove a generalized "No-speculative-trade" theorem according to which there cannot be common certainty of strict preference to trade. Moreover, we prove a generalization of the "No-agreeing-to-disagree" theorem.
KW - Agreement
KW - Awareness
KW - Common prior
KW - Inattention
KW - Interactive epistemology
KW - Speculative trade
KW - Unawareness
UR - http://www.scopus.com/inward/record.url?scp=84867671074&partnerID=8YFLogxK
U2 - 10.1016/j.geb.2012.09.003
DO - 10.1016/j.geb.2012.09.003
M3 - مقالة
SN - 0899-8256
VL - 77
SP - 100
EP - 121
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 1
ER -