Strategic stability in repeated signaling games (Q687058)
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English | Strategic stability in repeated signaling games |
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Strategic stability in repeated signaling games (English)
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20 July 1994
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This paper extends selection rules now used in the signaling literature (such as the Intuitive Criterion of the author and \textit{D. M. Kreps} [Q. J. Econ. 102, 179-221 (1987; Zbl 0626.90098)]) to a class of repeated signaling games, where each player can exchange the messages conditioned on his private information. STABAC (STAbility and BACkward induction) is defined as a procedure whereby forward induction arguments [see \textit{E. Kohlberg} and \textit{J.-F. Mertens}, Econometrica 54, 1003-1037 (1986; Zbl 0616.90103)] are applied in combination with the backward induction process. We specify the conditions under which any strategically stable outcome of a repeated signaling game includes an equilibrium that induces a stable equilibrium outcome in every subform, whence STABAC does not eliminate any stable outcome of the repeated signaling game.
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repeated signaling games
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forward induction
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backward induction
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strategically stable outcome
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