Week 10 - Bayesian NE

Question 1

when does a game have imperfect information?

Answer 1

if players do not know what moves their opponent made up to that point

Question 2

when does a game have incomplete information?

Answer 2

if at least one player does not know the payoffs of the others with certainty. we must consider their beliefs about the preferences of the other players.

Question 3

what do we do in Harsanyi’s Transformation?

Answer 3

we imagine that partners take on preferences based on their type, and their type is determined by the realization of a random variable / by Nature

Question 4

what is the assumption of a common prior?

Answer 4

we assume that players assign the same probabilities to nature’s moves