ON THE EXPECTED VALUE OF GAMES WITH ABSENTMINDEDNESS

Piccione and Rubinstein argue that a seemingly paradoxical form of tim e inconsistency can arise in games of imperfect recall. Their argument depends on calculating the expected value of a game from the standpoi nt of a prayer in the middle of play. We claim that this concept is no t well defined in games with absentmindness (where two nodes on a path can be in the same information set) without additional assumptions. W e show that, under some reasonable assumptions, no time inconsistency arises. Different assumptions will validate Piccione and Rubinstein's calculations, but these are such as to remove the appearance of parado x. Journal of Economic Literature Classification Numbers: C70, D80, D8 4. (C) 1997 Academic Press.