Harsanyi Transformation

The Harsanyi Transformation is a method used in game theory to analyze strategic situations involving uncertainty about other players’ preferences or types. It involves converting a game with incomplete information into a game of complete information by introducing a hypothetical "chance" move that randomly assigns each player their private information before play begins. This way, the uncertain aspects are modeled as probabilistic events, allowing players to make rational decisions based on expected outcomes, leading to clearer analysis of strategic behavior and equilibrium in complex, uncertain settings.