Free Access
| Issue |
E.J.E.S.S.
Volume 14, Number 3, 2000
|
|
|---|---|---|
| Page(s) | 271 - 308 | |
| DOI | https://doi.org/10.1051/ejess:2000120 | |
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), CBLU, University of Leeds
* revised and updated by: Marcus Hennecke, Ross Moore, Herb Swan
* with significant contributions from:
Jens Lippmann, Marek Rouchal, Martin Wilck and others -->
DOI: 10.1051/ejess:2000120
Common knowledge and interactive behaviors:
European Journal of Economic and Social Systems 14
N
3 (2000) pp. 271-308
Common knowledge and interactive behaviors:
A survey
Frédéric Koessler
BETA-Theme, Université Louis Pasteur, 61 Avenue de la Forêt-Noire,
67085 Strasbourg Cedex, France
Abstract:
This paper surveys the notion of common knowledge
taken from game theory and computer science. It studies and illustrates
more generally the effects of interactive knowledge in economic and social
problems. First of all, common knowledge is shown to be a central concept and
often a necessary condition for coordination, equilibrium achievement, agreement,
and consensus. We present how common knowledge can be practically generated,
for example, by particular advertisements or leadership. Secondly, we prove that
common knowledge can be harmful, essentially in various cooperation and negotiation
problems, and more generally when there are conflicts of interest. Finally, in some
asymmetric relationships, common knowledge is shown to be preferable for some players,
but not for all. The ambiguous welfare effects of higher-order knowledge on
interactive behaviors leads us to analyze the role of decentralized communication
in order to deal with dynamic or endogenous information structures.
Keywords:
Interactive knowledge, common knowledge, information structure, communication
Correspondence and reprints: Frédéric Koessler
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Copyright EDP Sciences 2000