Abstract
This paper provides a set-theoretic model of knowledge and unawareness. A new property called Awareness Leads to Knowledge shows that unawareness of theorems not only constrains an agent’s knowledge, but also can impair his reasoning about what other agents know. For example, in contrast to Li (J Econ Theory 144:977–993, 2009), Heifetz et al. (J Econ Theory 130:78–94, 25 2006) and the standard model of knowledge, it is possible that two agents disagree on whether another agent knows a particular event. The model follows Aumann (Ann Stat 4:1236–1239, 1976) in defining common knowledge and characterizing it in terms of a self-evident event, but departs in showing that no-trade theorems do not hold.
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I am grateful to Larry G. Epstein and Paulo Barelli for their continuous guidance and encouragement throughout this project. I would also like to thank Jan Eeckhout, Jeffrey Ely, Yossi Feinberg, Dino Gerardi, Aviad Heifetz, Jing Li, Bart Lipman, Martin Meier, Alessandro Pavan, Burkhard Schipper, William Thomson, Gábor Virág, the seminar participants at UBC, Colorado at Boulder, Maastricht, Paris I, Piraeus, Queen Mary, Rochester, Southampton, Western Ontario, the 2006 NBER/NSF/CEME Conference on General Equilibrium Theory, the 2006 Midwest Economic Theory Conference, CETC 2007, XVI European Workshop on General Equilibrium, TARK XI, 8th SAET, EEA-ESEM 2007. This paper is part of my thesis at the University of Rochester.
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Galanis, S. Unawareness of theorems. Econ Theory 52, 41–73 (2013). https://doi.org/10.1007/s00199-011-0683-x
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DOI: https://doi.org/10.1007/s00199-011-0683-x