Game
of incomplete information
to
if
n is
athastfpyess.hr
private information
not
known
does not
necessarily
have to be
for the other
player you can also
player a
have incomplete info
Bayesian equilibrium
abt
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n
urself
I
fi
i
dislikes L
now
a
tgif
is
definition
strategy
complete contingentplan for
alt
player types
Now players can
gg
Situation where each knows
their own type but notthe others
be divided into
different types within
players
Enemple
the
from tbook
stranger knows his type while the
Sheriff Earp does not know
the
Nature is choosing the type of the
stranger's type
Nature
AMX
slowpoke
L
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These
T.FI
3
et
the
are
probabilities
the
known
to
tot
not
my
A a
type
3
I
I
No Of profiles
É
23
8profiles
Earp
I
stranger Gunslinger
Slowpoke
D
W
D
W
Forthe gunslinger type stranger
draw
Possible equilibria
now
the no
q
profiles left is
4
12
1 x 2
wait is dominated
by
pooling
payees
q
DEDsc.ws
WIDI
3
Ze
t
4
2
312
the
De is betterfor Earp
At stranger'sdecision
now
jiff
to cowpoke
Ws gives a bettepayoff
equilibrium then Ds
2
4
5
for we for Earp
8
because we showed
Wsj
Euperted value of carp's choice
t
I
2 4 1
at
4
Hours exercise is make theprobability for gunslinger
and the other 7 p
ofthe
DE DS Dsi strangers
anything
piftPjir9MhrWeDsaD
Earp Emp value
both types
p
a
6