Unawareness, beliefs, and speculative trade

Arbeitspapier

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 can not be common certainty of strict preference to trade. Moreover, we prove a generalization of the No-agreeing-to-disagree theorem. Finally, we show the existence of a universal unawareness belief type space.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 11-8

Classification and Topics

• Classification: Wirtschaft ; Game Theory and Bargaining Theory: General ; Noncooperative Games ; General Equilibrium and Disequilibrium: Financial Markets ; Information, Knowledge, and Uncertainty: General ; Asymmetric and Private Information; Mechanism Design
• Subject: unawareness ; awareness ; common prior ; agreement ; speculative trade ; universal type-space ; interactive epistemology ; inattention

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Heifetz, Aviad ; Meier, Martin ; Schipper, Burkhard C.
• Event: Veröffentlichung
• (who): University of California, Department of Economics
• (where): Davis, CA
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/58387
• Last update: 10.03.2025, 11:43 AM CET