Resource title

Interactive Unawareness and Speculative Trade

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Resource description

The standard state-spaces of asymmetric information preclude non-trivial forms of unawareness (Dekel, Lipman and Rustichini, 1998). We introduce a generalized state-space model that allows for non-trivial unawareness among several individuals, and which satisfies strong properties of knowledge as well as all the desiderata on unawareness proposed this far in the literature. In an example of speculative trade, we demonstrate how mutual unawareness of fundamentals allows for common knowledge of willingness to trade together with strict preference for trade. Such a state of affairs is impossible to model in standard information structures with strong properties of knowledge.

Resource author

Aviad Heifetz, Martin Meier, Burkhard C. Schipper

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22866

Resource license

Adapt according to the presented license agreement and reference the original author.