Agreeing to Agree or Why We Cannot Agree on the Odds that Your Firm is More Profitable than Mine

20 Pages Posted: 18 Jul 2004

See all articles by Ehud Lehrer

Ehud Lehrer

Tel Aviv University - School of Mathematical Sciences

Dov Samet

Tel Aviv University - Faculty of Management

Date Written: September 2003

Abstract

Aumann has shown that agents who have a common prior cannot have common knowledge of their posteriors for event E if these posteriors do not coincide. But given an event E, can the agents have posteriors with a common prior such that it is common knowledge that the posteriors for E do coincide? A necessary and sufficient condition for this is the existence of a nonempty finite event F with the following two properties. First, it is common knowledge at F that the agents cannot tell whether or not E. Second, this still holds true at F, when F becomes common knowledge.

Keywords: Agreement theorem, common knowledge

JEL Classification: D82, D70

Suggested Citation

Lehrer, Ehud and Samet, Dov, Agreeing to Agree or Why We Cannot Agree on the Odds that Your Firm is More Profitable than Mine (September 2003). Available at SSRN: https://ssrn.com/abstract=564743 or http://dx.doi.org/10.2139/ssrn.564743

Ehud Lehrer (Contact Author)

Tel Aviv University - School of Mathematical Sciences ( email )

Tel Aviv 69978
Israel

Dov Samet

Tel Aviv University - Faculty of Management ( email )

P.O. Box 39010
Ramat Aviv, Tel Aviv, 69978
Israel
972-3-640-8024 (Phone)
972-3-640-7742 (Fax)

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