Mechanism Design With Set-Theoretic Beliefs

Jing Chen
Massachusetts Institute of Technology
October 3, 2011

In settings of incomplete information, we put forward (1) a very conservative ---indeed, purely set-theoretic--- model of the beliefs (including totally wrong ones) that each player may have about the payoff types of his opponents, and (2) a new and robust solution concept, based on mutual belief of rationality, capable of leveraging such conservative beliefs.