Pragmatic languages with universal grammars
AbstractThis paper constructs the equilibrium for a specific code that can be seen as a “universal grammar” in a class of common interest Sender–Receiver games where players communicate through a noisy channel. We propose a Senderʼs signaling strategy which does not depend on either the game payoffs or the initial probability distribution. The Receiverʼs strategy partitions the set of possible sequences into subsets, with a single action assignment to each of them. The Senderʼs signaling strategy is a Nash equilibrium, i.e. when the Receiver responds best to the Senderʼs strategy, the Sender has no incentive to deviate. An example shows that a tie-breaking decoding is crucial for the block-coding strategy to be an equilibrium. Efficiency is analyzed by comparing how close ex-ante expected payoffs are to those of noiseless communication. Moreover, we study how long communication should be to achieve a given payoff-approximation.
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Bibliographic InfoArticle provided by Elsevier in its journal Games and Economic Behavior.
Volume (Year): 76 (2012)
Issue (Month): 2 ()
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Web page: http://www.elsevier.com/locate/inca/622836
Signaling game; Block-coding strategy; Separating equilibria;
Other versions of this item:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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