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Noise-proof equilibria in two-action signaling games

Carlsson, Hans and Dasgupta, Sudipto (1997) Noise-proof equilibria in two-action signaling games. Journal of Economic Theory, 77 (2). pp. 432-460. ISSN 0022-0531

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Abstract

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.

Item Type: Article
Journal or Publication Title: Journal of Economic Theory
Subjects:
Departments: Lancaster University Management School > Accounting & Finance
ID Code: 74559
Deposited By: ep_importer_pure
Deposited On: 08 Jul 2015 14:12
Refereed?: Yes
Published?: Published
Last Modified: 22 Nov 2017 23:27
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/74559

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