9 - Correct and Symmetric Beliefs in Psychological Games

Summary

This chapter starts by showing that a simple belief hierarchy in combination with common belief in rationality leads to psychological Nash equilibrium. It then turns to the weaker notion of symmetric belief hierarchies and shows, in a similar fashion, that a symmetric belief hierarchy in combination with common belief in rationality leads to psychological correlated equilibrium. It subsequently investigates the one theory per choice condition and demonstrates how it leads to canonical psychological correlated equilibrium when combined with common belief in rationality and a symmetric belief hierarchy.