Private Information: Similarity as Compatibility

Abstract. We investigate the continuity of equilibrium in differential informa-tion economies with a finite number of agents. In this setting, agents can make contingent contracts based on events that are commonly observed. With pri-vate information modeled as finite partitions of a compact and metrizable space of states of nature, we introduce a topology on information that evaluates the similarity between private information fields taking into account their compati-bility. This topology allows us to establish upper semicontinuity of the private core correspondence