Common belief in rationality in games with unawareness

Abstract

This paper investigates static games with unawareness, where players may be unaware of some of the choices that can be made. That is, different players may have different views on the game. We propose an epistemic model that encodes players’ belief hierarchies on choices and views, and use it to formulate the basic reasoning concept of common belief in rationality . We do so for two scenarios: one in which we only limit the possible views that may enter the players’ belief hierarchies, and one in which we fix the players’ belief hierarchies on views. For both scenarios we design a recursive elimination procedure that yields for every possible view the choices that can rationally be made under common belief in rationality.