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: We provide a geometric characterization of the set of interim equilibrium payoffs in the general class of costly signaling games. Our characterization offers a unified, belief-based framework to study both cheap talk and costly signaling, with or without transparent motives. The key ingredient is the analysis of Bayes-plausible belief distributions and signal-contingent interim values that are incentive-compatible for the sender. Geometrically, this leads to a constrained convexification of the graphs of the interim value correspondences. We apply and illustrate the results in a class of intimidation games. We also derive the sender's best equilibrium payoff under transparent motives. Finally, we compare the equilibrium outcomes to those arising when the sender can commit to a signaling strategy.

Keywords: belief-based approach; cheap talk; information transmission; incomplete information; signaling (search for similar items in EconPapers)
Date: 2025-07-08
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04455227v3
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