Chapter 12

Epistemic Game Theory

Eddie Dekel*,; Marciano Siniscalchi*,     * Tel Aviv University, Tel Aviv, Israel and Northwestern University, Evanston, IL, USA Northwestern University, Evanston, IL, USA

Abstract

Epistemic game theory formalizes assumptions about rationality and mutual beliefs in a formal language, then studies their behavioral implications in games. Specifically, it asks: what do different notions of rationality and different assumptions about what players believe about…what others believe about the rationality of players imply regarding play in a game? Being explicit about these assumptions can be important, because solution concepts are often motivated intuitively in terms of players’ beliefs and their rationality; ...

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