Inductive reasoning about unawareness

Grant, Simon and Quiggin, John (2013) Inductive reasoning about unawareness. Economic Theory, 54 3: 717-755. doi:10.1007/s00199-012-0734-y

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Author Grant, Simon
Quiggin, John
Title Inductive reasoning about unawareness
Journal name Economic Theory   Check publisher's open access policy
ISSN 0938-2259
1432-0479
Publication date 2013-11
Year available 2012
Sub-type Article (original research)
DOI 10.1007/s00199-012-0734-y
Open Access Status Not Open Access
Volume 54
Issue 3
Start page 717
End page 755
Total pages 39
Place of publication Heidelberg, Germany
Publisher Springer
Collection year 2014
Language eng
Subject 2002 Cultural Studies
Abstract We develop a model of games with awareness that allows for differential levels of awareness. We show that, for the standard modal-logical interpretations of belief and awareness, a player cannot believe there exist propositions of which he is unaware. Nevertheless, we argue that a boundedly rational individual may regard the possibility that there exist propositions of which she is unaware as being supported by inductive reasoning, based on past experience and consideration of the limited awareness of others. In this paper, we provide a formal representation of inductive reasoning in the context of a dynamic game with differential awareness. We show that, given differential awareness over time and between players, individuals can derive inductive support for propositions expressing their own unawareness. We consider the ecological rationality of heuristics to guide decisions in problems involving differential awareness.
Keyword Bounded rationality
Induction
Unawareness
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Non HERDC
School of Economics Publications
 
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