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Title:Credible deviations from signaling equilibria PDF Logo
Authors:Eső, Péter
Schummer, James
Issue Date:2005
Series/Report no.:Discussion paper // Center for Mathematical Studies in Economics and Management Science 1406
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 Re-ceiver could form over that set. We show that this idea characterizes a unique equilibrium outcome in two classes of games. First, in mono-tonic 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' (1987) D1 criterion on this class of games. Second, we examine a version of Crawford and Sobel's (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.
Subjects:Signaling games
robust equilibrium
Document Type:Working Paper
Appears in Collections:Discussion Papers, Kellogg School of Management, Northwestern University

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