Abstract

We study the consequences of thruthful communication among agents in a game-theoretic setting. To this end we consider strategic games in the presence of an interaction structure, which specifies groups of players who can communicate their preferences with each other, assuming that initially each player only knows his own preferences. We focus on the outcome of iterated elimination of strictly dominated strategies (IESDS) that can be obtained in any intermediate state of the communication process. The main result of the paper, Theorem 4.2, provides the epistemic characteri-zation of such “intermediate ” IESDS outcomes under the assumption of common knowledge of rationality. To describe the knowledge of the players we adapt the general framework of Apt et al. [3] to reason about preferences. Finally, we de-scribe a distributed program that allows the players to compute the outcome of IESDS in any intermediate state. An initial, short version of this paper appeared as [28]. 1