Voronoi languages. Equilibria in cheap-talk games with high-dimensional types and few signals

Gerhard Jäger, Lars Koch-Metzger and Frank Riedel
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Gerhard Jäger: Center for Mathematical Economics, Bielefeld University
Lars Koch-Metzger: Center for Mathematical Economics, Bielefeld University

No 420, Center for Mathematical Economics Working Papers from Center for Mathematical Economics, Bielefeld University

Abstract: We study a communication game of common interest in which the sender observes one of infinite types and sends one of finite messages which is interpreted by the receiver. In equilibrium there is no full separation but types are clustered into convex categories. We give a full characterization of the strict Nash equilibria of this game by representing these categories by Voronoi languages. As the strategy set is infinite static stability concepts for finite games such as ESS are no longer sufficient for Lyapunov stability in the replicator dynamics. We give examples of unstable strict Nash equilibria and stable inefficient Voronoi languages. We derive efficient Voronoi languages with a large number of categories and numerically illustrate stability of some Voronoi languages with large message spaces and non-uniformly distributed types.

Keywords: Communication game; Dynamic stability; Cheap talk; Voronoi tesselation; Signaling game (search for similar items in EconPapers)
Date: 2011-08-15
New Economics Papers: this item is included in nep-evo and nep-gth
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:bie:wpaper:420

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