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Agent connectedness and backward induction

Bach, Christian W. and Heilmann, Conrad (2009) Agent connectedness and backward induction. LSE Choice Group working paper series, vol. 5, no. 3. The Centre for Philosophy of Natural and Social Science (CPNSS), London School of Economics, London, UK.

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Abstract

We analyze the sequential structure of dynamic games with perfect information. A three-stage account is proposed, that species setup, reasoning and play stages. Accordingly, we define a player as a set of agents corresponding to these three stages. The notion of agent connectedness is introduced into a type-based epistemic model. Agent connectedness measures the extent to which agents' choices are sequentially stable. Thus describing dynamic games allows to more fully understand strategic interaction over time. In particular, we provide suffcient conditions for backward induction in terms of agent connectedness. Also, our framework makes explicit that the epistemic independence assumption involved in backward induction reasoning is stronger than usually presumed, and makes accessible multiple-self interpretations for dynamic games.

Item Type: Monograph (Working Paper)
Official URL: http://www2.lse.ac.uk/CPNSS/Home.aspx
Additional Information: © 2009 The authors
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Sets: Research centres and groups > LSE Choice Group
Research centres and groups > Centre for Philosophy of Natural and Social Science (CPNSS)
Departments > Philosophy, Logic and Scientific Method
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: vol. 5, no. 3
Date Deposited: 08 Feb 2010 09:59
URL: http://eprints.lse.ac.uk/27000/

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