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What is the difference between Impression Management and Signaling Theory?

I don't believe those two terms are used in the same spheres. To me, an economic theorist, signaling plays a role in models with asymmetric information when the informed party moves first and the ...
Bayesian's user avatar
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5 votes

Signalling in a moral hazard contract with informed principals (that know their own type before contracting)

I'm not sure what exactly you're looking for, but here are some wild guesses: Bolton and Dewatripont (2005) Contract Theory, MIT Press. [Probably Chapters 5 and 6] Maskin and Tirole (1990) "The ...
Herr K.'s user avatar
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5 votes
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Signalling models and out of equilibrium beliefs

In my interpretation of the model, competitive firms imply that the wage always equals the expected productivity, which depends on the beliefs. Clearly, in any pooling equilibrium the on-path beliefs ...
Bayesian's user avatar
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4 votes

Signalling in a moral hazard contract with informed principals (that know their own type before contracting)

Contracting with an informed principal is not so easy because the agent can learn about the principal's type from the kind of contract offered. This introduces signaling, which can quickly get messy. ...
Bayesian's user avatar
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4 votes
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Strong sequential equilibria and the existence of others

There are three classes of equilibria of this game. The first class is sequential: \begin{equation} (s_1,s_2)=(y,r) \end{equation} and the beliefs are \begin{equation} \mu_1(a)=\mu_1(b)=\mu_2(a\mid y)...
Herr K.'s user avatar
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4 votes
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How to prove the WPBE is SE in signaling game?

Claim: If choice sets $T, M,$ and $A$ are finite, then an assessment $\{\beta^*_{r}, \beta^*_{s}, \mu^*\}$ is a WPBE (weak perfect Bayesian equilibrium) of the two-stage signalling game between ...
Kenneth Rios's user avatar
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4 votes
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What does 'continuation' as in continuation games, strategies, plays, etc. exactly mean?

Consider a game with private information such as a privately known willingness-to-pay or any other type. We usually model this as a game in which at first "Nature" draws the type and then ...
Bayesian's user avatar
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4 votes
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Cheap talk with mechanics

Responding to OP's comment For the babbling equilibrium, it's important to note that how S randomizes over his messages matters. In particular, the messages should be randomized in the same way across ...
Herr K.'s user avatar
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4 votes
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Sequential Equilibrium (SE) and Perfect Bayesian Equilibrium (PBE) in signaling games

Good question. At the moment, we still do not have a good grasp on what it means for an equilibrium to be a sequential equilibrium in the class of games you mention, with continuum of actions or types,...
Walrasian Auctioneer's user avatar
3 votes

Signaling game (beer and quiche) and consistent beliefs

It is likely that there is a typo in the Figure; if Nature goes way $S$ with probabilty $1/10$ the calculations and results are consistent. Hard to validate since original text of the problem or ...
Giskard's user avatar
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3 votes
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Beliefs about equilibrium paths with overlapping strategies

This is a common source of misunderstanding with regards to the concept of equilibrium. The specification of an equilibrium (at least in the standard theory of a one shot games) is agnostic about how ...
201p's user avatar
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3 votes

Beliefs about equilibrium paths with overlapping strategies

In signaling games, beliefs as well as strategies constitute an equilibrium. In other words, beliefs are a part of the equilibrium object. By deciding which equilibrium to focus on, you also (...
Herr K.'s user avatar
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3 votes

Divinity for Dummies

Signaling games (games in which an informed "sender" moves first and an uninformed "receiver" second) typically have a plethora of Perfect Bayesian Equilibria which is not really appealing in terms of ...
Bayesian's user avatar
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2 votes

The intuitive criterion

We cannot judge if your answer is correct because we don't see the game tree. First, I would not say that "we can rule out this equlibrium as a possible pooling PBE by the intuitive criterion&...
Bayesian's user avatar
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2 votes

How to understand the intuitive criterion

First, you also have to check all possible separating equilibria. You only checked (MSc,BSc), not (BSc,MSc) with all possible reactions of the receiver. No separating equilibrium exists here. The ...
Bayesian's user avatar
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2 votes
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Is the pooling equilibrium profit maximising for the firm?

As suggested in the comments, there are many different signaling models with firms and workers, and also what is the "standard model" to differnt people differs in details. In most of those ...
Bayesian's user avatar
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2 votes

Pooling equilbrium refinement

There are many refinements of pooling equilibria. For starters, you want to make sure all your equilibria are Perfect Bayesian Equilibria. After that, you can also require any equilibrium to survive ...
Regio's user avatar
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2 votes
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Signalling Game, Multiple Signals

From the perspective of the buyer, he is receiving 1 two-dimensional signal. After observing a combination of the wholesale price and limit order, the buyer can update their beliefs about the supplier'...
Regio's user avatar
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2 votes

Refinements in signaling games with three sender types

Both of these criteria refine equilibria where there is an unused message or action. Notice that if there is one action that is not used by any of the types, it can be either because they are all ...
Regio's user avatar
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2 votes
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Equilibria in Signaling and Screening

The difference between signaling and screening stems from the fundamental difference in bargaining power- who offers the contract for which her utility is the highest. While in screening the uniformed ...
Bayesian's user avatar
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2 votes
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What can be considered as a "message"

Given that $T^i$ is $i's$ finite set of messages and the mechanism uses the signal function to map $T$ to a signal, the architects of the mechanism can use any arbitrary label for the individual ...
Giskard's user avatar
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2 votes
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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?

The term "matrix game" is not a standard term of game theory, and where it is actually used, it is often used in different ways. Originally, it refered to finite 2-player zero-sum games. ...
VARulle's user avatar
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2 votes
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Any good resources on Information Economics Theory?

For the basics I always liked Varian's "Microeconomic Analysis" (the graduate book). For a good introduction into game theory (with a nice chapter on signalling) I would first read Gibbons' &...
Evangelos Con's user avatar
2 votes
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Market signaling with a national exam

I think your reasoning is correct. There is no need to have an ''expected pay'' as in a separating equilibrium, everyone ''knows'' that good types will take the test and bad types will not. The only ...
tdm's user avatar
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1 vote

'Accuracy' of a Signal

In this case, the signal is accurate [...] with probability $q > 1/2$ seems to mean that when the signal $s$ is observed, the probability of $c_2 = s$ rises to $q$ from $1/2$, while the ...
Giskard's user avatar
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1 vote

Any good resources on Information Economics Theory?

For other people who are interested, I had a talk with a professor who is a theorist and he pointed me to the following books: Introductory coverage of main ideas: "A Course In Microeconomic ...
Mwazr A's user avatar
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1 vote
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How does this reporting correspondence is redefined?

Without this being a clear answer onge thought could be to define the reporting correspondence as it follows $$R_i^t(s_i^t|h^{t-1})=\{s_i^t\in S_i^t\quad \text{where player $i$ reports truthfully her ...
Hunger Learn's user avatar
1 vote
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Competitive equilibrium in signaling games

Can there be a PBE in which both types do not get any education (i.e. $e=0$ for both)? Yes, workers' strategies $e^*(\theta_L)=e^*(\theta_H)=0$ and a wage function $w^*(e)$ satisfying: (i) $w^*(0)=E[\...
Herr K.'s user avatar
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1 vote

Signaling in zero-sum games?

I just taught my students that signalling is useless in Matching Pennies and Rock, Paper, Scissors. You would just lie and be random anyway so why would the other player ever believe any signal at all?...
Arthur Tarasov's user avatar

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