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Then, by (3.i), agent i knows that agent k is Bayesian rational.
Player (i) knows that (j) observes these contributions and, given (A2) believes that player (j) also behaves as an imperfect conditional cooperator.
Since it is common knowledge that agent i knows that agent k is Bayesian rational, it is also common knowledge that if μi skj) > 0, then skj must be optimal for k given some belief over S-k, so (3.i) is common knowledge.
K2 says that i knows that some possible world in Ω occurs no matter which possible world ω occurs.
It is related to the problem of the equivalence between 'i knows that p' and 'i knows that i knows that p' or Kip and KiKip in epistemic logic, first discussed by Jaakko Hintikka in his seminal book, Knowledge and Belief (Hintikka 1962, chap. 5).
Since (3.i) is common knowledge, all statements of the form 'For i, j, …, k ∈ N, i knows that j knows that … is Bayesian rational' follow by induction.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com