Common knowledge of payoff uncertainty in games

Boudewijn de Bruin

pp. 79-97

in: Synthese 163 (1), 2008.

Abstract

Using epistemic logic, we provide a non-probabilistic way to formalise payoff uncertainty, that is, statements such as ‘player i has approximate knowledge about the utility functions of player j.’ We show that on the basis of this formalisation common knowledge of payoff uncertainty and rationality (in the sense of excluding weakly dominated strategies, due to Dekel and Fudenberg (1990)) characterises a new solution concept we have called ‘mixed iterated strict weak dominance.’