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Risky shifts as multi-sender signaling

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  • Honryo, Takakazu

Abstract

This paper addresses the issue of risky shifts by a multi-sender signaling game. Senders compete in making proposals to be adopted by a group, hence they try to signal that they have the ability to correctly observe the state. This paper shows that senders tend to avoid making a moderate proposal, because a moderate proposal signals incompetence. When facing a moderate and a risky proposal, the group tends to adopt the risky one, and we have risky shifts as a result.

Suggested Citation

  • Honryo, Takakazu, 2018. "Risky shifts as multi-sender signaling," Journal of Economic Theory, Elsevier, vol. 174(C), pages 273-287.
    • Handle: RePEc:eee:jetheo:v:174:y:2018:i:c:p:273-287
    DOI: 10.1016/j.jet.2018.01.003
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    Cited by:

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    3. Vida, Péter & Honryo, Takakazu, 2021. "Strategic stability of equilibria in multi-sender signaling games," Games and Economic Behavior, Elsevier, vol. 127(C), pages 102-112.
    4. Andreas Grunewald & Emanuel Hansen & Gert Pönitzsch, 2020. "Political selection and the optimal concentration of political power," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 273-311, July.

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    More about this item

    Keywords

    Signaling game; Risky shifts;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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