Here’s a similarly-motivated model which I have found useful for the knowledge of economic agents.
Rather than imagining that agents choose their actions as a function of their information (which is the usual picture), imagine that agents can choose their action for every world-state. For instance, if I’m a medieval smith, I might want to treat my iron differently depending on its composition.
In economic models, it’s normal to include lots of constraints on agents’ choices—like a budget constraint, or a constraint that our medieval smith cannot produce more than n plows per unit of iron. With agents choosing their actions in every world, we can introduce information as just another constraint: if I don’t have information distinguishing two worlds, then I am constrained to take the same action in those two worlds. If the medieval smith cannot distinguish iron with two different compositions, then the action taken in those two worlds must be the same.
One interesting feature of this model is that “knowledge goods” can be modeled quite naturally. In our smith example: if someone hands the smith a piece of paper which has different symbols written on it in worlds where the iron has different composition, and the smith can take different actions depending on what the paper says, then the smith can use that to take different actions in worlds where the iron has different composition.
Here’s a similarly-motivated model which I have found useful for the knowledge of economic agents.
Rather than imagining that agents choose their actions as a function of their information (which is the usual picture), imagine that agents can choose their action for every world-state. For instance, if I’m a medieval smith, I might want to treat my iron differently depending on its composition.
In economic models, it’s normal to include lots of constraints on agents’ choices—like a budget constraint, or a constraint that our medieval smith cannot produce more than n plows per unit of iron. With agents choosing their actions in every world, we can introduce information as just another constraint: if I don’t have information distinguishing two worlds, then I am constrained to take the same action in those two worlds. If the medieval smith cannot distinguish iron with two different compositions, then the action taken in those two worlds must be the same.
One interesting feature of this model is that “knowledge goods” can be modeled quite naturally. In our smith example: if someone hands the smith a piece of paper which has different symbols written on it in worlds where the iron has different composition, and the smith can take different actions depending on what the paper says, then the smith can use that to take different actions in worlds where the iron has different composition.