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Neutrally Stable Outcomes in Cheap-Talk Coordination Games

  • Banerjee, Abhijit
  • Weibull, Jorgen W.

This paper examines equilibrium and stability in symmetric two- player cheap-talk games. In particular, we characterize the set of neutrally stable outcomes infinite cheap-talk 2 x 2 coordination games. This set is finite and does not depend on risk-dominance relations. As the number of messages goes to infinity, this set expands to a countable limit set that has exactly one cluster point, the Pareto efficient Nash equilibrium payoff. In contrast, the corresponding limit set of strictly perfect outcomes is shown to be dense in the interval spanned by the Nash equilibrium payoffs of the game. It is also shown that the limit set of neutrally stable outcomes coincides with the set of neutrally stable outcomes when the message set is (countably) infinite.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 32 (2000)
Issue (Month): 1 (July)
Pages: 1-24

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Handle: RePEc:eee:gamebe:v:32:y:2000:i:1:p:1-24
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  1. Blume Andreas & Kim Yong-Gwan & Sobel Joel, 1993. "Evolutionary Stability in Games of Communication," Games and Economic Behavior, Elsevier, vol. 5(4), pages 547-575, October.
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  9. A. J. Robson, 2010. "Efficiency in Evolutionary Games: Darwin, Nash and the Secret Handshake," Levine's Working Paper Archive 540, David K. Levine.
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