Horn’s rule says that messages can be kept ambiguous if only a single interpretation is plausible. Speakers only perform costly disambiguation to convey surprising information. This paper shows that, while noncooperative game theory cannot justify Horn’s rule, evolutionary game theory can. In order to model the evolution of signalling, the pooling equilibrium needs to be one’s starting point. But in such an equilibrium, the plausible interpretation is made, and the receiver is therefore already predisposed to interpret absence of a signal as referring to a plausible event. From there on, a marked signal referring to an implausible event can evolve. At the same time, the paper identifies an exception to Horn’s rule. If giving a plausible interpretation for an implausible event is very costly, then in the pooling equilibrium the implausible interpretation is always made. In this exceptional case, only an inefficient separating equilibrium disobeying Horn’s rule can evolve.
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Paper provided by Utrecht School of Economics in its series Working Papers with number
07-12.
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
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