Abstract
In games with costly signaling, some equilibria are vulnerable to deviations which could be "unambiguously" interpreted as coming from a unique set of Sender-types. This occurs when these types are precisely the ones who gain from deviating for any beliefs the Receiver could form over that set. We show that this idea characterizes a unique equilibrium outcome in two classes of games. First, in monotonic signaling games, only the Riley outcome is immune to this sort of deviation. Our result therefore provides a plausible story behind the selection made by Cho and Kreps's (Q J Econ 102:179-221, 1987) D1 criterion on this class of games. Second, we examine a version of Crawford and Sobel (Econometrica 50:1431-1451, 1982) model with costly signaling, where standard refinements have no effect. We show that only a Riley-like separating equilibrium is immune to these deviations.
Original language | English (US) |
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Pages (from-to) | 411-430 |
Number of pages | 20 |
Journal | International Journal of Game Theory |
Volume | 38 |
Issue number | 3 |
DOIs | |
State | Published - 2009 |
Keywords
- Refinements
- Robust equilibrium
- Sender-receiver
- Signaling games
ASJC Scopus subject areas
- Statistics and Probability
- Mathematics (miscellaneous)
- Social Sciences (miscellaneous)
- Economics and Econometrics
- Statistics, Probability and Uncertainty