A belief-based approach to signaling

Frederic Koessler, Marie Laclau () and Tristan Tomala
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Marie Laclau: GREGHEC - Groupement de Recherche et d'Etudes en Gestion - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique

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Abstract: In this paper, we provide a geometric characterization of the set of interim equilibrium payoff vectors in a general class of signaling games. To obtain a tractable characterization, we use the belief based approach found in the literature on repeated games with incomplete information, cheap talk and Bayesian persuasion. The key ingredient is to consider Bayes-plausible belief distributions that are incentive-compatible for the sender. Geometrically, this leads to a constrained convexification of the graphs of the non-revealing interim payoff correspondences. Our characterization extends the analogous result for sender-receiver cheap talk games. We illustrate the results with some classical signaling games. We derive the best equilibrium payoff for the sender when his preferences are type-independent. For zero-sum preferences, we obtain an explicit formula for the ex-ante equilibrium payoff and establish a simple condition for the uniqueness of interim equilibrium payoffs.

Keywords: belief-based approach; cheap talk; information transmission; incomplete information; signaling (search for similar items in EconPapers)
Date: 2024-12-27
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04455227v2
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