Economic Theory

, Volume 6, Issue 3, pp 453–467 | Cite as

Depth of knowledge and the effect of higher order uncertainty

  • Stephen Morris
  • Andrew Postlewaite
  • Hyun Song Shin
Research Articles


A number of recent papers have highlighted the importance of uncertainty about others' information in models of asymmetric information. We introduce a notion that reflects the depth of knowledge in an information system. We show how the depth of knowledge can be used to bound the effect of higher order uncertainty in certain problems. We further provide bounds on the size of bubbles in finite horizon rational expectations models where the bounds depend on the depth of knowledge.


Information System Economic Theory Asymmetric Information Rational Expectation Expectation Model 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag 1995

Authors and Affiliations

  • Stephen Morris
    • 1
  • Andrew Postlewaite
    • 1
  • Hyun Song Shin
    • 2
  1. 1.Department of EconomicsUniversity of PennsylvaniaPhiladelphiaUSA
  2. 2.Department of EconomicsUniversity of SouthamptonSouthamptonEngland

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