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Separating equilibrium in quasi-linear signaling games.
- Source :
- International Journal of Game Theory; Dec2019, Vol. 48 Issue 4, p1033-1054, 22p
- Publication Year :
- 2019
-
Abstract
- Using a network approach we provide a characterization of a separating equilibrium for standard signaling games where the sender's payoff function is quasi-linear. Given a strategy of the sender, we construct a network where the node set and the length between two nodes are the set of the sender's type and the difference of signaling costs, respectively. Construction of a separating equilibrium is then equivalent to constructing the length between two nodes in the network under the condition that the response of the receiver is a node potential. When the set of the sender's type is a real interval, shortest path lengths are antisymmetric and a node potential is unique up to a constant. A strategy of the sender in a separating equilibrium is characterized by some differential equation with a unique solution. Our results can be readily applied to a broad range of economic situations, such as for example the standard job market signaling model of Spence, a model not captured by earlier papers. [ABSTRACT FROM AUTHOR]
- Subjects :
- EQUILIBRIUM
DIFFERENTIAL equations
GAMES
MARKETING models
Subjects
Details
- Language :
- English
- ISSN :
- 00207276
- Volume :
- 48
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- International Journal of Game Theory
- Publication Type :
- Academic Journal
- Accession number :
- 139273629
- Full Text :
- https://doi.org/10.1007/s00182-019-00677-1