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A Revelation Principle for (Boundedly) Bayesian Rationalizable Strategies

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Imperfections and Behavior in Economic Organizations

Part of the book series: Theory and Decision Library ((TDLC,volume 11))

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Abstract

The revelation principle is reconsidered in the light of recent work questioning its general applicability, as well as other work on the Bayesian foundations of game theory. Implementation in rationalizable strategies is considered. A generalized version of the revelation principle is proposed recognizing that, unless agents all have dominant strategies, the outcome of any allocation mechanism depends not only upon agents’ “intrinsic” types, but also upon their beliefs about other agents and their strategic behaviour. This generalization applies even if agents are “boundedly rational” in the sense of being Bayesian rational only with respect to bounded models of the game form.

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  1. Department of Economics Stanford, University Stanford, Stanford, California, USA

    Peter J. Hammond

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  1. Virginia Polytechnic Institute and State University, Blacksburg, Virginia, USA

    Robert P. Gilles

  2. Tilburg University, Tilburg, The Netherlands

    Pieter H. M. Ruys

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Hammond, P.J. (1994). A Revelation Principle for (Boundedly) Bayesian Rationalizable Strategies. In: Gilles, R.P., Ruys, P.H.M. (eds) Imperfections and Behavior in Economic Organizations. Theory and Decision Library, vol 11. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-1370-0_3

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  • DOI: https://doi.org/10.1007/978-94-011-1370-0_3

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