Repeated signaling games

Research output: Contribution to journalArticle

20 Citations (Scopus)

Abstract

I analyze a class of repeated signaling games in which the informed player's type is persistent and the history of actions is perfectly observable. In this context, a large class of possibly complex sequences of signals can be supported as the separating equilibrium actions of the "strong type" of the informed player. I characterize the set of such sequences. I also characterize the sequences of signals in least cost separating equilibria (LCSE) of these games. In doing this, I introduce a state variable that can be interpreted as a measure of reputation. This gives the optimization problem characterizing the LCSE a recursive structure. I show that, in general, the equilibrium path sequences of signals have a simple structure. The shapes of the optimal sequences depend critically on the relative concavities of the payoff functions of different types, which measure the relative preferences towards payoff smoothing.

Original languageEnglish (US)
Pages (from-to)841-854
Number of pages14
JournalGames and Economic Behavior
Volume66
Issue number2
DOIs
StatePublished - Jul 1 2009
Externally publishedYes

Fingerprint

Signaling games
Separating equilibrium
Costs
State variable
Optimization problem
Concavity
Smoothing

Keywords

  • Asymmetric information
  • Dynamic games
  • Repeated games
  • Signaling games

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Cite this

Repeated signaling games. / Kaya, Ayca.

In: Games and Economic Behavior, Vol. 66, No. 2, 01.07.2009, p. 841-854.

Research output: Contribution to journalArticle

Kaya, Ayca. / Repeated signaling games. In: Games and Economic Behavior. 2009 ; Vol. 66, No. 2. pp. 841-854.
@article{dc92c8e9d8be4ba8b112814ffc8be3cb,
title = "Repeated signaling games",
abstract = "I analyze a class of repeated signaling games in which the informed player's type is persistent and the history of actions is perfectly observable. In this context, a large class of possibly complex sequences of signals can be supported as the separating equilibrium actions of the {"}strong type{"} of the informed player. I characterize the set of such sequences. I also characterize the sequences of signals in least cost separating equilibria (LCSE) of these games. In doing this, I introduce a state variable that can be interpreted as a measure of reputation. This gives the optimization problem characterizing the LCSE a recursive structure. I show that, in general, the equilibrium path sequences of signals have a simple structure. The shapes of the optimal sequences depend critically on the relative concavities of the payoff functions of different types, which measure the relative preferences towards payoff smoothing.",
keywords = "Asymmetric information, Dynamic games, Repeated games, Signaling games",
author = "Ayca Kaya",
year = "2009",
month = "7",
day = "1",
doi = "10.1016/j.geb.2008.09.030",
language = "English (US)",
volume = "66",
pages = "841--854",
journal = "Games and Economic Behavior",
issn = "0899-8256",
publisher = "Academic Press Inc.",
number = "2",

}

TY - JOUR

T1 - Repeated signaling games

AU - Kaya, Ayca

PY - 2009/7/1

Y1 - 2009/7/1

N2 - I analyze a class of repeated signaling games in which the informed player's type is persistent and the history of actions is perfectly observable. In this context, a large class of possibly complex sequences of signals can be supported as the separating equilibrium actions of the "strong type" of the informed player. I characterize the set of such sequences. I also characterize the sequences of signals in least cost separating equilibria (LCSE) of these games. In doing this, I introduce a state variable that can be interpreted as a measure of reputation. This gives the optimization problem characterizing the LCSE a recursive structure. I show that, in general, the equilibrium path sequences of signals have a simple structure. The shapes of the optimal sequences depend critically on the relative concavities of the payoff functions of different types, which measure the relative preferences towards payoff smoothing.

AB - I analyze a class of repeated signaling games in which the informed player's type is persistent and the history of actions is perfectly observable. In this context, a large class of possibly complex sequences of signals can be supported as the separating equilibrium actions of the "strong type" of the informed player. I characterize the set of such sequences. I also characterize the sequences of signals in least cost separating equilibria (LCSE) of these games. In doing this, I introduce a state variable that can be interpreted as a measure of reputation. This gives the optimization problem characterizing the LCSE a recursive structure. I show that, in general, the equilibrium path sequences of signals have a simple structure. The shapes of the optimal sequences depend critically on the relative concavities of the payoff functions of different types, which measure the relative preferences towards payoff smoothing.

KW - Asymmetric information

KW - Dynamic games

KW - Repeated games

KW - Signaling games

UR - http://www.scopus.com/inward/record.url?scp=67349183192&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=67349183192&partnerID=8YFLogxK

U2 - 10.1016/j.geb.2008.09.030

DO - 10.1016/j.geb.2008.09.030

M3 - Article

AN - SCOPUS:67349183192

VL - 66

SP - 841

EP - 854

JO - Games and Economic Behavior

JF - Games and Economic Behavior

SN - 0899-8256

IS - 2

ER -