TY - JOUR
T1 - Cheap talk in games with incomplete information
AU - Ben-Porath, Elchanan
PY - 2003/1/1
Y1 - 2003/1/1
N2 - The paper studies Bayesian games which are extended by adding pre-play communication. Let Γ be a Bayesian game with full support and with three or more players. The main result is that if players can send private messages to each other and make public announcements then every communication equilibrium outcome, q, that is rational (i.e., involves probabilities that are rational numbers) can be implemented in a sequential equilibrium of a cheap talk extension of Γ, provided that the following condition is satisfied: There exists a Bayesian Nash equilibrium s in Γ such that for each type ti of each player i the expected payoff of ti in q is larger than the expected payoff of ti in s.
AB - The paper studies Bayesian games which are extended by adding pre-play communication. Let Γ be a Bayesian game with full support and with three or more players. The main result is that if players can send private messages to each other and make public announcements then every communication equilibrium outcome, q, that is rational (i.e., involves probabilities that are rational numbers) can be implemented in a sequential equilibrium of a cheap talk extension of Γ, provided that the following condition is satisfied: There exists a Bayesian Nash equilibrium s in Γ such that for each type ti of each player i the expected payoff of ti in q is larger than the expected payoff of ti in s.
KW - Bayesian games
KW - Communication
KW - Sequential equilibrium
UR - http://www.scopus.com/inward/record.url?scp=0038743071&partnerID=8YFLogxK
U2 - 10.1016/S0022-0531(02)00011-X
DO - 10.1016/S0022-0531(02)00011-X
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AN - SCOPUS:0038743071
SN - 0022-0531
VL - 108
SP - 45
EP - 71
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 1
ER -