Cognitive Empathy in Conflict Situations
38 Pages Posted: 15 Jan 2016 Last revised: 14 Mar 2020
Date Written: March 7, 2020
Two individuals are involved in a conflict situation in which preferences are ex-ante uncertain. While they eventually learn their own preferences, they have to pay a small cost if they want to secretly learn their opponent’s preferences. We show that there is an interval with an upper bound less than one and lower bound greater than zero such that, for sufficiently small positive costs of information acquisition, in any Bayesian Nash equilibrium of the resulting game of incomplete information the probability of acquiring information about the opponent’s preferences is within this interval.
Keywords: Incomplete Information, Information Acquisition, Theory of Mind, Conflict, Imperfect Empathy
JEL Classification: C72, C73, D03, D74, D82, D83
Suggested Citation: Suggested Citation