Pragmatic languages with universal grammars

Penelope Hernandez (), Amparo Urbano and Jose Vila ()

Games and Economic Behavior, 2012, vol. 76, issue 2, 738-752

Abstract: This paper constructs the equilibrium for a specific code that can be seen as a “universal grammar” in a class of common interest Sender–Receiver games where players communicate through a noisy channel. We propose a Senderʼs signaling strategy which does not depend on either the game payoffs or the initial probability distribution. The Receiverʼs strategy partitions the set of possible sequences into subsets, with a single action assignment to each of them. The Senderʼs signaling strategy is a Nash equilibrium, i.e. when the Receiver responds best to the Senderʼs strategy, the Sender has no incentive to deviate. An example shows that a tie-breaking decoding is crucial for the block-coding strategy to be an equilibrium. Efficiency is analyzed by comparing how close ex-ante expected payoffs are to those of noiseless communication. Moreover, we study how long communication should be to achieve a given payoff-approximation.

Keywords: Signaling game; Block-coding strategy; Separating equilibria (search for similar items in EconPapers)
JEL-codes: C61 C73 D82 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Pragmatic Languages with Universal Grammars (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:76:y:2012:i:2:p:738-752

DOI: 10.1016/j.geb.2012.08.009

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