In incomplete
information
games, in order to predict the optimal behavior of his opponent, a player has to form
expectations and assessments of his opponent's
type.
In a simultaneous game of incomplete information, each player's belief about
any other player's type is exogenously given, or it is inferred by Bayes'
rule from an intial draw by nature that determines the various types of the
players. In sequential games of incomplete information, the players' beliefs
about their opponents' types must be updated according to Bayes' rule during
the play of the game whenever this is possible by having observed another
player's move.
