Repeated signaling games

Research output: Contribution to journalArticle

21 Scopus citations

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

Keywords

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

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Repeated signaling games'. Together they form a unique fingerprint.

  • Cite this