Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Noise-proof equilibria in two-action signaling games
AU - Carlsson, Hans
AU - Dasgupta, Sudipto
PY - 1997/12
Y1 - 1997/12
N2 - An equilibrium of a signaling game isnoise-proofif it survives a small perturbation of the Receiver's perception of the signal. We derive conditions for noise proofness and prove existence for signaling games where the Receiver has two actions, the message space is a real interval, and standard monotonicity conditions are met. Such games have a continuum of equilibria which satisfy the never-a-weak-best-reply criterion (NWBR), but often a unique noise-proof equilibrium. Every noise-proof equilibrium satisfies NWBR and is “insufficiently revealing”: With some probability the Receiver chooses an action which would be suboptimal under full information.
AB - An equilibrium of a signaling game isnoise-proofif it survives a small perturbation of the Receiver's perception of the signal. We derive conditions for noise proofness and prove existence for signaling games where the Receiver has two actions, the message space is a real interval, and standard monotonicity conditions are met. Such games have a continuum of equilibria which satisfy the never-a-weak-best-reply criterion (NWBR), but often a unique noise-proof equilibrium. Every noise-proof equilibrium satisfies NWBR and is “insufficiently revealing”: With some probability the Receiver chooses an action which would be suboptimal under full information.
U2 - 10.1006/jeth.1997.2329
DO - 10.1006/jeth.1997.2329
M3 - Journal article
VL - 77
SP - 432
EP - 460
JO - Journal of Economic Theory
JF - Journal of Economic Theory
SN - 0022-0531
IS - 2
ER -