Equilibrium Selection in Cheap Talk Games: ACDC rocks when Other Criteria remain silent

Adrian de Groot Ruiz, Theo Offerman and Sander Onderstal
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Adrian de Groot Ruiz: University of Amsterdam
Theo Offerman: University of Amsterdam

No 11-037/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This discussion paper resulted in a publication in 'Games and Economic Behavior' , 2015, 91, 14-25.

Currently no refinement exists that successfully selects equilibria across a wider range of Cheap Talk games. We propose a generalization of refinements based on credible deviations, such as neologism proofness and announcement proofness. According to our Average Credible Deviation Criterion (ACDC), the stability of an equilibrium is determined by the frequency and the size of credible deviations. In our experiment, we find support for the relevance of credible deviations. In addition, we find support for ACDC in settings where other criteria remain silent. ACDC also explains results from previous experiments.

Keywords: cheap talk; neologism proofness; announcement proofness; credible deviation; ACDC; experiment (search for similar items in EconPapers)
JEL-codes: C72 C92 D82 D83 (search for similar items in EconPapers)
Date: 2011-02-14, Revised 2011-10-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20110037

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