Type space
The list of private situations a player might be in, together with what each of those situations tells them about everyone else.
Often misread asEquating a type with a payoff parameter such as a cost or a valuation, and so ignoring that the type also fixes what the player believes about everyone else.
How to see it
Your type is everything you privately know, beliefs included
A type is not just your cost or your valuation. It is the whole bundle of private information you are carrying, and that bundle includes what you believe about what everyone else is carrying. Listing the types is listing the possible states of private knowledge in the game.
The checkTwo players with the same valuation but different views of the opposition are different types, because the type has to carry the beliefs as well as the payoffs.
Try itDescribe a bidder who values the painting at a hundred pounds and thinks the rivals are rich, and another who values it at a hundred and thinks the rivals are poor. If your model gives them the same label, your type space is too thin.
Know these first
Leads on to
Easily confused with
Sources
- Harsanyi, J. C. (1967-68). Management Science 14(3), 159-182; 14(5), 320-334; 14(7), 486-502.
- Fudenberg, D. & Tirole, J. (1991). MIT Press.
- Myerson, R. (1991). Harvard University Press.