Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/221431 
Year of Publication: 
1993
Series/Report no.: 
Discussion Paper No. 1074
Publisher: 
Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science, Evanston, IL
Abstract: 
Signaling games with infinite action spaces may have no sequential equilibrium. We prove that adding cheap talk to these games solves the non-existence problem; the sequential equilibrium outcome correspondence is upper hemi-continuous. In addition, when the signaling space has sufficiently many signals, any cheap talk sequential equilibrium outcome can be appproximated by a sequential (e)-equilibrium of the game without cheap talk. In these cases, adding cheap talk does not fundamentally alter the nature of the game.
Document Type: 
Working Paper

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