[PDF][PDF] Strong forward induction in monotonic multi-sender signaling games

P Vida, T Honryo, H Azacis - 2022 - orca.cardiff.ac.uk
2022orca.cardiff.ac.uk
We introduce a new solution concept called strong forward induction which is implied by
strategic stability in generic finite multi-sender signaling games (Proposition 1) and can be
easily extended to and applied in arbitrary extensive form games with perfect recall. We
apply this notion to infinite monotonic signaling games and show that a unique pure strong
forward induction equilib-10 rium exists and its outcome is necessarily non-distorted
(Theorem 1). Finally, we show that in this class of games the non-distorted equilibrium …
We introduce a new solution concept called strong forward induction which is implied by strategic stability in generic finite multi-sender signaling games (Proposition 1) and can be easily extended to and applied in arbitrary extensive form games with perfect recall. We apply this notion to infinite monotonic signaling games and show that a unique pure strong forward induction equilib-10 rium exists and its outcome is necessarily non-distorted (Theorem 1). Finally, we show that in this class of games the non-distorted equilibrium outcomes are limits of stable outcomes of finite games (Proposition 2).
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