Neutrally Stable Outcomes in Cheap-Talk Coordination Games
AbstractThis paper examines equilibrium and stability in symmetric two- player cheap-talk games. In particular, we characterize the set of neutrally stable outcomes infinite cheap-talk 2 x 2 coordination games. This set is finite and does not depend on risk-dominance relations. As the number of messages goes to infinity, this set expands to a countable limit set that has exactly one cluster point, the Pareto efficient Nash equilibrium payoff. In contrast, the corresponding limit set of strictly perfect outcomes is shown to be dense in the interval spanned by the Nash equilibrium payoffs of the game. It is also shown that the limit set of neutrally stable outcomes coincides with the set of neutrally stable outcomes when the message set is (countably) infinite.
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Bibliographic InfoArticle provided by Elsevier in its journal Games and Economic Behavior.
Volume (Year): 32 (2000)
Issue (Month): 1 (July)
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Web page: http://www.elsevier.com/locate/inca/622836
Other versions of this item:
- Abhijit Banerjee & J�rgen W. Weibull, . "Neutrally Stable Outcomes in Cheap Talk Coordination Games," ELSE working papers 012, ESRC Centre on Economics Learning and Social Evolution.
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