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Questions tagged [signaling]

In signaling games, an informed sender moves first. Their action may "signal" information about the sender's type to an uniformed receiver who then acts based on an updated belief.

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Market signaling with a national exam

Question: Consider an economy with a competitive labour market in which firms pay a wage equal to the expected productivity of the employee. There are two types of employees: Good (with a productivity ...
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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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Signalling Game - Extensive Form

I am drawing the extensive form for Beer or Quiche game. Is there any difference in the following two representations or can either one can be used for representing the same information?
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Signalling a relation

I have a very basic, trivial question to ask. (I apologise if it is not a worthy problem) I have been trying to formulate an international Economics model where a larger country is trying to signal a ...
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Signaling game (beer and quiche) and consistent beliefs

I am confused why the top left node has numerator (9/10x1/9) instead of (1/10x1/9) since this should be the probability of reaching this node given the strategies? Same with upper right node, why is ...
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'Accuracy' of a Signal

I am trying to understand a line in the paper titled "Reference Dependent Consumption Plans" written by Matthew Rabin and Botond Koszegi, and published in the American Economic Review, Vol ...
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In a standard labor market signaling game, which weak Perfect-Bayesian equilibria (PBE) are actually sequential equilibria?

In a standard labor market signaling game with two types, the only "sensible" equilibria are the least-cost separating equilibria; as such these are the equilibria that survive a standard ...
Yashaswi Mohanty's user avatar
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Signalling with continuous actions and continuous types

Consider the following signalling game. Individuals choose an action $a \in \mathbb{R}$ to maximise \begin{equation} U(a, \theta) = \theta a - \frac{a^2}{2} + \mathbb{E}[\theta|a] \end{equation} where ...
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Any good resources on Information Economics Theory?

I am coming from a political economy/public choice perspective, trying to explore some ideas in signaling, especially the supply-side analysis of information transmission by the media/news. Although I ...
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Do there exist matrix games with more than two players? Can we extend existent models that have already used in signaling games?

In game theory, the simplest way to represent a two player games is with the help of matrix games. For example, assume that we want to model a market of traders, where one is a speculator and the rest ...
studen21's user avatar
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How does this reporting correspondence is redefined?

Let $\mathcal{R}_i$ be a non-empty, finite set and define the reporting correspondence $R_i:S→2^{\mathcal{R}_i}-\{\emptyset\}$ to be a mapping from player i’s type space to the collection of subsets ...
Hunger Learn's user avatar
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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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Job Market Signaling w/Continuous Ability

I am currently trying to brush up on job signaling models for the upcoming semester, and came across this old exam question. There are no solutions to the question (that I am aware of), and I'm having ...
equanimity's user avatar
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What can be considered as a "message"

As a sequel of some other questions that I have done for communication and information mechanisms with respect to the paper of Gossner I have a question for the signal function. Fix a finite set of ...
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Cheap talk with mechanics

Sorry in advance for asking too many questions. I am just seeking for some minor help and check if what I'm thinking is acceptable. A customer R takes his car to the mechanic S. The mechanic can ...
Maybeline Lee's user avatar
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Competitive equilibrium in signaling games

Consider two firms are offering contracts to an employee who has either high or low productivity ($θ_H$ or $θ_L$, with $θ_H > θ_L$). The employee can acquire education $e$ which is costly but does ...
Maybeline Lee's user avatar
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Job Market Signaling

My Solution is this Separating equilibrium High type worker chooses $e_H = e^* >0$ Low type worker chooses $e_L =0$ Firms believes that if education is $e^* >0$ then the worker is high type and ...
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What is the difference between Impression Management and Signaling Theory?

I'm interested in theories on how organisations shape their stakeholders' (especially consumers' and investors') perceptions and decisions. I read about Impression Management and Signaling Theory. ...
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The intuitive criterion

I have asked a similiar question before, but I would very much appreciate if someone would say if my reasoning in this particular case is correct. Consider the down below: For part a) I have found ...
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How to understand the intuitive criterion

I am studying for my exam in MicroEconomics 2 which involves game theory and I have trouble with understanding the intuitive criterion and how to use it. Consider the down below signalling game. ...
Mathias's user avatar
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Is the pooling equilibrium profit maximising for the firm?

Is the pooling equilibrium profit maximising for the firm? I understand that when there are no ways for the firm to distinguish among highly productive and low productive worker the best the firm can ...
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Strong sequential equilibria and the existence of others

I am working on the following game and I have to find all strong sequential equilibria here. I determined that here any belief derived from a fully mixed strategy gives a distribution (1/2, 1/2) over ...
Rodger Haggings's user avatar
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Do Human Resources use information on applicants' child rearing effort as a signal

In Spence's Job Market Signaling paper (a non-paywalled version is available here) firms observe applicants' educational investment. From these signals the firms glean information on the "type&...
Giskard's user avatar
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3 votes
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Signalling models and out of equilibrium beliefs

Consider the simplest version of the Spence signalling model. There are two types of worker, with either productivity $\theta_H$ or instead productivity $\theta_H < \theta_L$. The proportions of ...
afreelunch's user avatar
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Signalling in a moral hazard contract with informed principals (that know their own type before contracting)

I was studying Laffont & Martimort textbook for a paper, but their section on moral hazard contract with informed principals assumes that the principal only knows his own type after contracting. ...
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What does 'continuation' as in continuation games, strategies, plays, etc. exactly mean?

I am in my first course in grad level game theory. While I was reading through Fudenberg and Tirole's Game Theory, I constantly come into contact with the word 'continuation' to describe some games ...
David Kim's user avatar
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1 answer
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Pooling equilibrium in akerlof's lemon market with certification cost

Consider a market for 300 used cars where 1/3 of all cars are good quality cars and the rest are bad quality cars. All these cars are owned by (potential) sellers to begin with and each seller owns ...
Deepanshu Yadav's user avatar
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1 answer
300 views

How to prove the WPBE is SE in signaling game?

The definition of a signaling game: A signaling game is an extensive game with the following structure: (i) A move of chance first determines a state of the world/type $t ∈ T$, which is drawn from T ...
lalala8797's user avatar
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Pooling equilbrium refinement

I am analyzing a model in the signaling game, There are three stages of a game. there are two participants in the game, a supplier and a buyer. The supplier has private information about its capacity ...
user3425989's user avatar
2 votes
1 answer
78 views

Signalling Game, Multiple Signals

I am solving a three-stage game in a supply chain with one buyer and one supplier. The supplier has private information on its production capacity. The supplier also has the option to sell to the ...
user3425989's user avatar
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Signalling game with multiple signal [duplicate]

I am solving a signaling game where the manufacturer has private information about its production capacity. It can signal it using the wholesale price or limiting the order quantity of the buyer. Have ...
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Signalling Game

In the signaling game, we have two or more types that have distinct distribution. I wonder did you come across any signaling game where the types have continuous distribution? I am not sure whether ...
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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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Signaling in zero-sum games?

The foundation of this question is a bit vague (based on something overheard at a conference) but I'm hoping someone here can provide some clarification. I overheard a conversation between two ...
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1 answer
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Signalling Model (Rearranging the FOCs of UMP)

I'm currently reading "SAVING RATES AND POVERTY: THE ROLE OF CONSPICUOUS CONSUMPTION AND HUMAN CAPITAL" by Omer Moav and Zvika Neeman, and I encounter some problem deriving one of the equations. ...
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Spence's Job Market Signaling Game

I have a little doubt in the Job Market Signalling Game. I am referring to A Primer in Game Theory: Gibbons, Chapter 4, Signaling Games The attached paragraph refers to a Separating Equilibrium case ...
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Three stage two player signalling game, pooling equilbrium

I am solving a three-stage game in which first the sender sends the signal, then the receiver acts based on the signal and finally, the sender moves again. The sender has two types high and low and ...
user3425989's user avatar
3 votes
2 answers
357 views

Beliefs about equilibrium paths with overlapping strategies

This is a basic question, but I cannot find the answer to it. In short, equilibria are often conditioned on a specific strategy. E.g., given A's strategy, B updates her beliefs to xyz. My problem is ...
user32425's user avatar
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1 answer
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Equilibria in Signaling and Screening

I am now studying the Spence's job market model using both signaling and screening. It turns out that, when a worker's reservation value = 0 (she can get 0 if she does not get employed), then both ...
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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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Is it possible to have a signaling game in which all players are both informed (about themselves) and uniformed (about other players)?

So far, the models of Signaling Games I have seen involve two players. One player is known as the Sender and has more information. The other player is known as the Receiver and has less information. ...
Stan Shunpike's user avatar
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0 answers
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Can I refine the set of equilibria in a signaling game to the sender-optimal outcome?

Main question: I've been reading about communication games a lot, and I'm wondering if there are good criteria to select between two separating-ish equilibria. I think of a separating equilibria as ...
Pburg's user avatar
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11 votes
2 answers
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When should a receiver randomize across actions in a signaling game?

Suppose there is a signaling game with a finite message space $M$, finite action space $A$, and finite type space $T$. Even simpler, all sender types have identical preferences (the receiver just ...
Pburg's user avatar
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31 votes
3 answers
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How to intuitively understand the 'Intuitive criterion'?

The intuitive criterion by Cho and Kreps is a refinement to minimise the set of perfect Bayesian equilibria in signalling games. What would a simple and intuitive example to explain this criterion be? ...
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