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Rationalization In Signaling Games: Theory And Applications Author info | Abstract | Publisher info | Download info | Related research | Statistics PIERPAOLO BATTIGALLI () (Bocconi University and IGIER, Via Salasco, 5, 20136, Milano, Italy)
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Focusing on signaling games, I illustrate the relevance of the rationalizability approach for the analysis multistage games with incomplete information. I define a class of iterative solution procedures, featuring a notion of "forward induction": the Receiver tries to explain the Sender's message in a way which is consistent with the Sender's strategic sophistication and certain given restrictions on beliefs. The approach is applied to some numerical examples and economic models. In a standard model with verifiable messages a full disclosure result is obtained. In a model of job market signaling the best separating equilibrium emerges as the unique rationalizable outcome only when the high and low types are sufficiently different. Otherwise, rationalizability only puts bounds on the education choices of different types.
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Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal International Game Theory Review .
Volume (Year): 08 (2006)
Issue (Month): 01 ()
Pages: 67-93
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Keywords: Incomplete information ; signaling ; rationalization ; Subject Classification: C72 ; Subject Classification: D82 ; Other versions of this item:
Find related papers by JEL classification: B4 - Schools of Economic Thought and Methodology - - Economic Methodology C0 - Mathematical and Quantitative Methods - - General C6 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory D5 - Microeconomics - - General Equilibrium and Disequilibrium D7 - Microeconomics - - Analysis of Collective Decision-Making M2 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics
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