Questions tagged [equilibrium-selection]
The equilibrium selection tag applies to question which deal with the issue of selecting one or more out of multiple equilibria based on some criterion.
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How do I show that if there are more than 2 types in a signaling game, then multiple equilibria satisfy the intuitive criterion?
I'm trying to figure out why in a signaling game with more than 2 types, multiple equilibria with different equilibrium strategies satisfy the intuitive criterion.
Take the classic Spence job market ...
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Why Sequenial Equilibrium (SE) imposes no restrictions on the off-equilibrium beliefs in the Spence's model?
I read some lectures on the Spence's model. Some (see e.g. P31 of lecture PPT from MIT game thoery course) mention that SE imposes no restrictions on the off-equilibrium beliefs but without proof. I ...
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Sequential Equilibrium (SE) and Perfect Bayesian Equilibrium (PBE) in signaling games
I know that in the paper "Perfect Bayesian equilibrium and sequential equilibrium", the authors proved that for signaling games (considering the simple case that there are two periods and ...
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Refinements in signaling games with three sender types
What are the pros and cons of the Intuitive Criterion and the Criterion of Divinity in signaling games with three types?
I find that separating equilibria often survive the intuitive criterion, ...
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Equation: If the equilibrium level of GDP is $21,500, what is the marginal propensity to consume?
Equations for $C$, $I$, $G$, and $NX$ are given below. If the equilibrium level of $GDP$ is $\$21,500$, what is the marginal propensity to consume?
$$C = 1,500 + (MPC)\cdot Y$$
$$I = 1,000$$
$$G = 2,...
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What is time inconsistency in monetary policy?
I am reading through a bit of policy literature and see authors referring often to the problem of time inconsistency when setting monetary policy.
Can anyone explain what is time inconsistency?
An ...
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How does Brouwer's fixed point theorem relate to Walrasian equilibrium?
I am trying to understand Walrasian equilibrium and its connection to fixed points, especially how we can apply Brouwer’s fixed point theorem to the notion of Walrasian equilibrium. I understand the ...
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Refinements of Walrasian equilibrium
In Walrasian equilibrium there is a market clearing price, that is
$$
D(p) = S(p)
$$
or the supply is worthless, so you can have
$$
D(p) < S(p) \mbox{ if } p = 0.
$$
This can be summarized as
$$
p \...
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Divinity for Dummies
I understood the general idea of divinity: that it helps to rule out "unreasonable" equilibria. However, can someone explain it in more details with simple examples so that a senior undergrad student ...
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