Inconsistencies in extensive games: Common knowledge is not the issue

Martin Dufwenberg, Johan Lindén

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

In certain finite extensive games with perfect information, Cristina Bicchieri (1989) derives a logical contradiction from the assumptions that players are rational and that they have common knowledge of the theory of the game. She argues that this may account for play outside the Nash equilibrium. She also claims that no inconsistency arises if the players have the minimal beliefs necessary to perform backward induction. We here show that another contradiction can be derived even with minimal beliefs, so there is no paradox of common knowledge specifically. These inconsistencies do not make play outside Nash equilibrium plausible, but rather indicate that the epistemic specification must incorporate a system for belief revision. Whether rationality is common knowledge is not the issue.

Original languageEnglish (US)
Pages (from-to)103-114
Number of pages12
JournalErkenntnis
Volume45
Issue number1
StatePublished - Dec 1 1996
Externally publishedYes

ASJC Scopus subject areas

  • Philosophy
  • Logic

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