Giacomo Bonanno

We introduce the notion of constructive suprema and of constructively directed sets. The Axiom of Choice turns out to be equivalent to the postulate that every supremum is constructive, but also to the hypothesis that every directed set admits a function assigning to each finite subset an upper bound. The Axiom of Multiple Choice implies a simple set-theoretical induction principle , stating that any system of sets that is closed under unions of well-ordered subsystems and contains all finite subsets of a given set must also contain that set itself. This is not provable without choice principles but equivalent to the statement that the existence of joins for constructively directed subsets of a poset follows from the existence of joins for nonempty well-ordered subsets. Moreover, we establish the equivalence of SIP with several other fundamental statements concerning inductivity, compactness, algebraic closure systems, and the exchange between chains and directed sets

The notion of Nash equilibrium in static oligopoly games is based on the assumption that each firm knows its entire demand curve (and, therefore, its entire profit function). It is much more likely, however, that firms only have some idea of the outcome of small price variations within some relatively small interval of prices. This is because firms can only learn their demand functions through price experiments and if they are risk-averse and/or have a low discount factor, they will be unwilling to engage in extensive price experiments involving large variations in price. We can therefore expect firms to experiment through small price variations and stop when they reach a price such that no small deviation..

Since Lewis’s (1969) and Aumann’s (1976) pioneering contributions, the concepts of common knowledge and common belief have been discussed extensively in the literature, both syntactically and semantically1. At the individual level the difference between knowledge and belief is usually identified with the presence or absence of the Truth Axiom ( iA → A), which is interpreted as ”if individual i believes that A, then A is true”. In such a case the individual is often said to know that A (thus it is possible for an individual to believe a false proposition but she cannot know a false proposition). Going to the interpersonal level, the literature then distinguishes between common knowledge and common belief on the basis of whether or not the Truth Axiom is postulated at the individual level. However, while at the individual level the Truth Axiom captures merely a relationship between the individuals’ beliefs and the external world, at the interpersonal level it has very strong implications. For example, the following is a consequence of the Truth Axiom: i jA → iA, that is, if individual i believes that individual j believes that A, then individual i herself believes that A. Thus, in contrast to other axioms, the Truth Axiom does not merely reflect individual agents’ “logic of belief”. (The reason why the Truth Axiom is much stronger in an interpersonal context than appears at first glance is that it amounts to assuming that agreement of any individual’s belief with the truth is common knowledge). Given its logical force, it is not surprising to find that it has strong implications for the logic of common knowledge. In particular, if each individual’s beliefs satisfy the strongest logic of knowledge (namely S5 or KT5), the associated common knowledge operator satisfies this logic too. Such is not the case for belief: bereft of the Truth Axiom, even the strongest logic for individual belief (KD45) is insufficient to ensure the satisfaction of the “Negative Introspection” axiom for common belief: ¬ ∗A → ∗¬ ∗A (where ∗ denotes the common belief operator)..

Making a prediction is essentially expressing a belief about the future. It is therefore natural to interpret later predictions as revisions of earlier ones and to investigate the notion of belief revision in this context. We study, both semantically and syntactically, the following principle of minimum revision of prediction: “as long as there are no surprises, that is, as long as what actually occurs had been predicted to occur, then everything which was predicted in the past, if still possible, should continue to be predicted, and no new predictions should be added.”

Counterexamples to two results by Stalnaker (Theory and Decision, 1994) are given and a corrected version of one of the two results is proved. Stalnaker's proposed results are: (1) if at the true state of an epistemic model of a perfect information game there is common belief in the rationality of every player and common belief that no player has false beliefs (he calls this joint condition ‘strong rationalizability’), then the true (or actual) strategy profile is path equivalent to a Nash equilibrium; (2) in a normal-form game a strategy profile is strongly rationalizable if and only if it belongs to C8, the set of profiles that survive the iterative deletion of inferior profiles.

An information completion of an extensive game is obtained by extending the information partition of every player from the set of her decision nodes to the set of all nodes. The extended partition satisfies Memory of Past Knowledge (MPK) if at any node a player remembers what she knew at earlier nodes. It is shown that MPK can be satisfied in a game if and only if the game is von Neumann (vN) and satisfies memory at decision nodes (the restriction of MPK to a player's own decision nodes). A game is vN if any two decision nodes that belong to the same information set of a player have the same number of predecessors. By providing an axiom for MPK we also obtain a syntactic characterization of the said class of vN games.

This paper suggests a way of formalizing the amount of information that can be conveyed to each player along every possible play of an extensive game. The information given to each player i when the play of the game reaches node x is expressed as a subset of the set of terminal nodes. Two definitions are put forward, one expressing the minimum amount of information and the other the maximum amount of information that can be conveyed without violating the constraint represented by the information sets. Our definitions provide intuitive characterizations of such notions as perfect recall, perfect information and simultanetty.

Two questions are examined within a model of vertical differentiation. The first is whether cost-reducing innovations are more likely to be observed in regimes of more intense or less intense competition. Following Delbono and Denicolo (1990) and Bester and Petrakis (1993) we compare two identical industries that differ only in the regime of competition: Bertrand versus Cournot. Since Cournot competition leads to lower output and higher prices, it can be thought of as a regime of less intense competition. We find that the increase in profits associated with any given cost reduction is higher in the case of Cournot competition than in the case of Bertrand competition. Thus there are cost-reducing innovations that would be pursued under Cournot competition but not under Bertrand competition.

We study belief change in the branching-time structures introduced in Bonanno (Artif Intell 171:144–160, 2007 ). First, we identify a property of branching-time frames that is equivalent (when the set of states is finite) to AGM-consistency, which is defined as follows. A frame is AGM-consistent if the partial belief revision function associated with an arbitrary state-instant pair and an arbitrary model based on that frame can be extended to a full belief revision function that satisfies the AGM postulates. Second, we provide a set of modal axioms that characterize the class of AGM-consistent frames within the modal logic introduced in Bonanno (Artif Intell 171:144–160, 2007 ). Third, we introduce a generalization of AGM belief revision functions that allows a clear statement of principles of iterated belief revision and discuss iterated revision both semantically and syntactically.

In her book Rationality and coordination (Cambridge University Press, 1994) Cristina Bicchieri brings together (and adds to) her own contributions to game theory and the philosophy of economics published in various journals in the period 1987-1992. The book, however, is not a collection of separate articles but rather a homogeneous unit organized around some central themes in the foundations of non-cooperative game theory. Bicchieri’s exposition is admirably clear and well organized. Somebody with a good knowledge of game theory would probably benefit mainly from reading the second part of Chapter 3 (from Section 3.6 onward) and Chapter 4. On the other hand, those who have had little exposure to game theory, would certainly benefit from reading the entire book. I shall begin with an overview of the content of the book and then offer some critical comments on what I consider to be the most important part of it

The principle of belief persistence, or conservativity principle, states that ’\Nhen changing beliefs in response to new evidence, you should continue to believe as many of the old beliefs as possible' (Harman, 1986, p. 46). In particular, this means that if an individual gets new information, she has to accommodate it in her new belief set (the set of propositions she believes), and, if the new information is not inconsistent with the old belief set, then (1) the individual has to maintain all the beliefs she previously had and (2) the change should be minimal in the sense that every proposition in the new belief set must be deducible from the union of the old belief set and the new information (see, e.g., Gardenfors, 1988; Stalnaker, 1984). We focus on this minimal notion of belief persistence and characterize it both semantically and syntactically. A ’possible world' semantic formalization of the principle easily comes to mind. The set of all the propositions that the individual believes corresponds to the set of states of the world that she considers possible and is a subset of the set of states that are not ruled out by the individual's information (or knowledge). It is required that, if the individual considers a state possible and her new information does not exclude this state, then she continue to consider it possible. Furthermore, if the individual regards a particular state as impossible, then she should continue to regard it as impossible unless her new information excludes all the states that she previously regarded as possible. This is closely related to the..

Since belief revision deals with the interaction of belief and information over time, branching-time temporal logic seems a natural setting for a theory of belief change. We propose two extensions of a modal logic that, besides the next-time temporal operator, contains a belief operator and an information operator. The first logic is shown to provide an axiomatic characterization of the first six postulates of the AGM theory of belief revision, while the second, stronger, logic provides an axiomatic characterization of the full set of AGM postulates. © 2006 Elsevier B.V. All rights reserved.

Given an extensive game, with every node x and every player i a subset ki(x) of the set of terminal nodes is associated, and is given the interpretation of player i's knowledge (or information) at node x. A belief of player i is a function that associates with every node x an element of the set Ki(x). A belief system is an n-tuple of beliefs, one for each player. A belief system is rational if it satisfies some natural consistency properties. The main result of the paper is that the notion of rational belief system gives rise to a refinement of the notion of subgame-perfect equilibrium.