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Catch-22 in a Signalling Game

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  • Fiona Carmichael

Abstract

In this paper signals are observed by two receivers who have different preferences about the sender and therefore respond to information about himin different ways. This can result in a Catch-22 for the sender; if he sends a signal to induce a positive response from one receiver, this may induce a negative response from the other. The problem is modelled as a three player game and the analysis shows that the Catch-22 can be resolved but only when there are three possibilities with respect to the sender's disposition or the initial probabilities relating to the sender's type are equal.

Suggested Citation

  • Fiona Carmichael, 2002. "Catch-22 in a Signalling Game," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(3), pages 375-392, September.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200209)158:3_375:ciasg_2.0.tx_2-n
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    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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