Abstract

The ancient puzzle of the Liar was shown by Tarski to be a genuine paradox or antinomy. I show, analogously, that certain puzzles of contemporary game theory are genuinely paradoxical, i.e., certain very plausible principles of rationality, which are in fact presupposed by game theorists, are inconsistent as naively formulated. ;I use Godel theory to construct three versions of this new paradox, in which the role of 'true' in the Liar paradox is played, respectively, by 'provable', 'self-evident', and 'justifiable'. I also construct in modal operator logic a paradox involving reflexive empirical reasoning. Unlike the paradox of the Liar, the paradox of reflexive reasoning does not depend on self-reference. ;I consider various solutions to the Liar paradox and evaluate how well these solutions cope with the paradox of reflexive reasoning. I then formalize the solution to the paradoxes which I favor: the indexical-hierarchical approach, first sketched out by Charles Parsons and Tyler Burge. In this solution, occurrences of the predicate 'true' in sentence-tokens are contextually relativized to levels of a hierarchy. Drawing also on some brief remarks of Bertrand Russell and Charles Parsons, I develop an account of the kind of schematic generality needed for this theory to be statable. ;Finally, I demonstrate that the principles shown to be paradoxical are in fact presupposed by contemporary game theorists in their reliance on the notion of common knowledge or, more precisely, mutual belief. I create novel analyses of and corresponding solutions to several recalcitrant puzzles within game theory, including the "chain-store paradox"