Notre Dame Journal of Formal Logic

Common Knowledge of Rationality in Extensive Games

Boudewijn de Bruin

Abstract

We develop a logical system that captures two different interpretations of what extensive games model, and we apply this to a long-standing debate in game theory between those who defend the claim that common knowledge of rationality leads to backward induction or subgame perfect (Nash) equilibria and those who reject this claim. We show that a defense of the claim à la Aumann (1995) rests on a conception of extensive game playing as a one-shot event in combination with a principle of rationality that is incompatible with it, while a rejection of the claim à la Reny (1988) assumes a temporally extended, many-moment interpretation of extensive games in combination with implausible belief revision policies. In addition, the logical system provides an original inductive and implicit axiomatization of rationality in extensive games based on relations of dominance rather than the usual direct axiomatization of rationality as maximization of expected utility

Article information

Source
Notre Dame J. Formal Logic Volume 49, Number 3 (2008), 261-280.

Dates
First available: 15 July 2008

Permanent link to this document
http://projecteuclid.org/euclid.ndjfl/1216152550

Digital Object Identifier
doi:10.1215/00294527-2008-011

Mathematical Reviews number (MathSciNet)
MR2428554

Zentralblatt MATH identifier
1154.91009

Subjects
Primary: 03B42: Logics of knowledge and belief (including belief change) 91A18: Games in extensive form 91A26: Rationality, learning

Keywords
common knowledge epistemic characterization theorem rationality

Citation

de Bruin, Boudewijn. Common Knowledge of Rationality in Extensive Games. Notre Dame Journal of Formal Logic 49 (2008), no. 3, 261--280. doi:10.1215/00294527-2008-011. http://projecteuclid.org/euclid.ndjfl/1216152550.


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