Title

Interdependent Preferences and Strategic Distinguishability

Document Type

Discussion Paper

Publication Date

9-2-2010

CFDP Number

1772R

CFDP Revision Date

2011-02-01

CFDP Pages

42

Abstract

A universal type space of interdependent expected utility preference types is constructed from higher-order preference hierarchies describing (i) an agent’s (unconditional) preferences over a lottery space; (ii) the agent’s preference over Anscombe-Aumann acts conditional on the unconditional preferences; and so on. Two types are said to be strategically indistinguishable if they have an equilibrium action in common in any mechanism that they play. We show that two types are strategically indistinguishable if and only if they have the same preference hierarchy. We examine how this result extends to alternative solution concepts and strategic relations between types.

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