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Title:Voronoi languages: Equilibria in cheap-talk games with high-dimensional types and few signals PDF Logo
Authors:Jäger, Gerhard
Koch-Metzger, Lars
Riedel, Frank
Issue Date:2009
Series/Report no.:Working papers // Institute of Mathematical Economics 420
Abstract:We study a communication game of common interest in which the sender observes one of infinite types and sends one of finite messages which is interpreted by the receiver. In equilibrium there is no full separation but types are clustered into convex categories. We give a full characterization of the strict Nash equilibria of this game by representing these categories by Voronoi languages. As the strategy set is infinite static stability concepts for finite games such as ESS are no longer sufficient for Lyapunov stability in the replicator dynamics. We give examples of unstable strict Nash equilibria and stable inefficient Voronoi languages. We derive efficient Voronoi languages with a large number of categories and numerically illustrate stability of some Voronoi languages with large message spaces and non-uniformly distributed types.
Subjects:Cheap talk
Signaling game
Communication game
Dynamic stability
Voronoi tesselation
JEL:C72
C73
D82
D83
Persistent Identifier of the first edition:urn:nbn:de:hbz:361-15602
Document Type:Working Paper
Appears in Collections:Working Papers, Center for Mathematical Economics (IMW), Bielefeld University

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