FROM CLASSICAL TO EPISTEMIC GAME THEORY

Abstract

In this paper, we give a historical overview of the transition from classical game theory to epistemic game theory. To that purpose we will discuss how important notions such as reasoning about the opponents, belief hierarchies, common belief, and the concept of common belief in rationality arose, and gradually entered the game theoretic picture, thereby giving birth to the field of epistemic game theory. We will also address the question why it took game theory so long before it finally incorporated the natural aspect of "reasoning" into its analysis. To answer the latter question we will have a close look at the earliest results in game theory, and see how they shaped our approach to game theory for many years to come.