NoteConservative belief and rationality

- A player has conservative beliefs if it ascribes the actual world positive probability.
- We consider strategies consistent with Common Conservative Belief of Rationality (CCBR).
- CCBR characterizes strategies in the support of a subjective correlated equilibrium where all playersʼ beliefs have common support.

Playersʼ beliefs may be incompatible, in the sense that player i can assign probability 1 to an event E to which player j assigns probability 0. One way to block incompatibility is to assume a common prior. We consider here a different approach: we require playersʼ beliefs to be conservative, in the sense that all players must ascribe the actual world positive probability. We show that common conservative belief of rationality (CCBR) characterizes strategies in the support of a subjective correlated equilibrium where all playersʼ beliefs have common support. We also define a notion of strong rationalizability, and show that it is characterized by CCBR.