A one-person doxastic characterization of Nash strategies

Abstract

Within a formal epistemic model for simultaneous-move games, we present the following conditions: (1) belief in the opponents' rationality (BOR), stating that a player believes that every opponent chooses an optimal strategy, (2) self-referential beliefs (SRB), stating that a player believes that his opponents hold correct beliefs about his own beliefs, (3) projective beliefs (PB), stating that i believes that j's belief about k's choice is the same as i's belief about k's choice, and (4) conditionally independent beliefs (CIB), stating that a player believes that opponents' types choose their strategies independently. We show that, if a player satisfies BOR, SRB and CIB, and believes that every opponent satisfies BOR, SRB, PB and CIB, then he will choose a Nash strategy (that is, a strategy that is optimal in some Nash equilibrium). We thus provide a sufficient collection of one-person conditions for Nash strategy choice. We also show that none of these seven conditions can be dropped. © 2007 Springer Science+Business Media B.V.