Signaling, screening, and core stability

Yusuke Kamishiro, Rajiv Vohra and Roberto Serrano

Journal of Economic Theory, 2023, vol. 213, issue C

Abstract: This paper provides a noncooperative approach to core stability in an economy with incomplete information. We study the perfect Bayesian equilibria of an extensive form mechanism that extends the one used by Serrano and Vohra (1997) to implement the core of a complete-information economy. This leads to a version of the core that we refer to as the sequential core, which allows for information to be transmitted among the agents during the process of coalition formation. Such information flows include proposals that can be viewed as signaling devices and/or screening contracts. Equilibrium refinements are then used to provide justifications for the coarse core and the fine core. As a robustness check, we show that the sequential core corresponds to stationary PBE outcomes of an infinite horizon bargaining game.

Keywords: Core; Incomplete information; Perfect Bayesian equilibrium; Signaling; Screening; Nash program (search for similar items in EconPapers)
JEL-codes: C71 C72 D51 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053123001114
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Signaling, Screening, and Core Stability (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:213:y:2023:i:c:s0022053123001114

DOI: 10.1016/j.jet.2023.105715

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().