Signaling Games

Babbling equilibrium An equilibrium in which the 19 sender’s strategy is independent of type and the re20 ceiver’s strategy is independent of signal. 21 Behavior strategy A strategy for an extensive-form game 22 that specifies the probability of taking each action at 23 each information set. 24 Behavioral type A player in a game who is constrained to 25 follow a given strategy. 26 Cheap-talk game A signaling game in which players’ 27 preferences do not depend directly on signals. 28 Condition D1 An equilibrium refinement that requires 29 out-of-equilibrium beliefs to be supported on types 30 that have the most to gain from deviating from a fixed 31 equilibrium. 32 Divinity An equilibrium refinement that requires out-of33 equilibrium beliefs to place relatively more weight on 34 types that gain more from deviating from a fixed equi35 librium. 36 Equilibrium outcome The probability distribution over 37 terminal nodes in a game determined by equilibrium 38 strategy. 39 Handicap principle The idea that animals communicate 40 fitness through observable characteristics that reduce 41 fitness. 42 Incomplete information game A game in which players 43 lack information about the strategy sets or payoff func44 tions of their opponents. 45 Intuitive criterion An equilibrium refinement that re46 quires out-of-equilibrium beliefs to place zero weight 47 on types that can never gain from deviating from 48 a fixed equilibrium outcome. 49 Nash equilibrium A strategy profile in a game in which 50 each player’s strategy is a best response to the equilib51 rium strategies of the other players. 52 Neologism-proof equilibrium An equilibrium that ad53 mits no self-signaling set. 54 Pooling equilibrium A signaling-game equilibrium in 55 which each all sender types send the same signal with 56 probability one. 57 Receiver In a signaling game, the uninformed player. 58 Self-signaling set A set of types C with the property that 59 precisely types in the set C gain from inducing the best 60 response to C relative to a fixed equilibrium. 61 Sender In a signaling game, the informed agent. 62 Separating equilibrium A signaling-game equilibrium in 63 which sender types sent signals from disjoint subsets of 64 the set of available signals. 65 Signaling game A two-player game of incomplete infor66 mation in which one player is informed and the other 67 in not. The informed player’s strategy is a type-contin68 gent message and the uninformed player’s strategy is 69 a message-continent action. 70 Single-crossing condition A condition that guarantees 71 that indifferent curves from a given family of prefer72 ences cross at most one. 73 Spence-mirrlees condition A differential condition that 74 orders the slopes of level sets of a function. 75 Standard signaling game A signaling game in which 76 strategy sets and payoff functions satisfy monotonicity 77 properties. 78 Type In an incomplete information game, a variable that 79 summarizes private information. 80 Verifiable information game A signaling game with the 81 property that each type has a signal that can only be 82 sent by that type. 83