Equilibrium selection through forward induction in cheap talk games

• 成果类型: Article
• 署名作者: Antic, Nemanja; Persico, Nicola
• 署名单位: Northwestern University; National Bureau of Economic Research
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2023.01.006
• 发表日期: 2023
• 页码: 299-310
• 关键词: Cheap talk; equilibrium selection; forward induction

摘要

This paper provides a refinement that uniquely selects the ex-ante Pareto dominant equilibrium in a cheap talk game, provided one exists. The refinement works by embedding any cheap talk game into a class of two-stage games where: in stage 1 sender and receiver can, at a cost, alter their preferences; and in stage 2 the cheap talk game is played. For such games, we show that a forward induction logic can be invoked to select the ex-ante Pareto-dominant equilibrium in the second stage. Cheap talk games with exogenously fixed preferences are then treated as limiting cases of this larger class of games.(c) 2023 Elsevier Inc. All rights reserved.