EC487 Problem Set 2 Review

EC487_Advanced_Microeconomics

We take the limit as a tool to approach the solutions that are reasonable.

improper prior = have no prior (they don’t know anything about $\theta$)

Strategy: Assume what the other player is playing, and check mine.

$$E[\theta |a_0]=\frac{{\int }_{\underline{\theta }}^{{\theta }^{\ast }}\theta dF(\theta )}{F(\hat{\theta })-F(\underline{\theta })}$$

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Todo

• Consistency Requirement
• Definition of weak PBE

What to ask:

• do we have to prove the uniqueness of the solution?
• What’s the intuition if we take the limit as incomplete info to complete info.