An epistemic model of an agent who does not reflect on reasoning processes

This paper introduces an epistemic model of a boundedly rational agent under the two assumptions that (i) the agent’s reasoning process is in accordance with the model but (ii) the agent does not reflect on these reasoning processes. For such a concept of bounded rationality a semantic interpretation by the possible world semantics of the Kripke (1963) type is no longer available because the definition of knowledge in these possible world semantics implies that the agent knows all valid statements of the model. The key to my alternative semantic approach is the extension of the method of truth tables, first introduced for the propositional logic by Wittgenstein (1922), to an epistemic logic so that I can determine the truth value of epistemic statements for all relevant truth conditions. In my syntactic approach I define an epistemic logic–consisting of the classical calculus of propositional logic plus two knowledge axioms–that does not include the inference rule of necessitation, which claims that an agent knows all theorems of the logic. As my main formal result I derive a determination theorem linking my semantic with my syntactic approach. The difference between my approach and existing knowledge models is illustrated in a game-theoretic application concerning the epistemic justification of iterative solution concepts.