Publication Type
Journal Article
Version
acceptedVersion
Publication Date
9-2015
Abstract
We say that agreeing to agree is possible for an event E if there exist posterior beliefs of the agents with a common prior such that it is common knowledge that the agents' posteriors for E coincide. We propose a notion called Dutch book which is a profile of interim contracts between an outsider and the agents based on the occurrence of E, such that the outsider makes positive profit in all states. We show that in a finite state space, when the agents cannot tell whether Eoccurred or not, agreeing to agree is possible for E if and only if there is no Dutch book on E. This characterization also holds in countable state spaces with two agents. We weaken the notion of Dutch book to characterize agreeing to agree in a countable state space with multiple agents, when each set in each agent's information partition is finite.
Keywords
Agreement theorem, Common knowledge, Common prior, Dutch book, No trade theorem
Discipline
Economic Theory
Research Areas
Economic Theory
Publication
Games and Economic Behavior
Volume
93
First Page
108
Last Page
116
ISSN
0899-8256
Identifier
10.1016/j.geb.2015.08.002
Publisher
Elsevier
Citation
CHEN, Yi-Chun; LEHRER, Ehud; LI, Jiangtao; SAMET, Dov; and SHMAYA, Eran.
Agreeing to agree and Dutch books. (2015). Games and Economic Behavior. 93, 108-116.
Available at: https://ink.library.smu.edu.sg/soe_research/2199
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.geb.2015.08.002