Abstract
Well-behaved infinite signaling games may have no sequential equilibria. We prove that adding cheap talk to these games "solves" the nonexistence problem: the limit of sequential equilibrium outcomes of finite approximating games is a sequential equilibrium outcome of the cheap-talk extension of the limit game. In addition, when the signaling space has no isolated points, any cheap-talk sequential equilibrium outcome can be approximated by a sequential ε-equilibrium of the game without cheap talk.
Original language | English (US) |
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Pages (from-to) | 917-942 |
Number of pages | 26 |
Journal | Econometrica |
Volume | 64 |
Issue number | 4 |
DOIs | |
State | Published - Jul 1996 |
Externally published | Yes |
Keywords
- Cheap talk
- Existence
- Infinite action-games
- Sequential equilibrium
- Signaling games
ASJC Scopus subject areas
- Economics and Econometrics