Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/198864 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7504
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper points out issues with having behavioral players together with fully rational players in a game. One example of behavioral players is naive or sophisticated players; one can study higher-order beliefs when sophistication is the first-order belief, but the paper also considers alternative ways of modelling the type space and non-Bayesian updating. The paper shows that players must have heterogeneous priors and this type of heterogeneous priors cannot be justified by acquiring private information from the common prior. Furthermore, equilibrium definitions need to be modified for games with behavioral players.
Subjects: 
naivete
misspecified beliefs
heterogeneous priors
higher-order beliefs
equilibrium definition
Harsanyi doctrine
Document Type: 
Working Paper
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