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Equilibrium selection in signaling games with teams: Forward induction or faster adaptive learning?

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  • Cooper, David J.
  • Kagel, John H.

Abstract

Teams are shown to violate the most basic of equilibrium refinements in signaling games: single-round deletion of dominated strategies (part of the Cho-Kreps intuitive criteria). This is important because, to the extent that teams can be easily induced to violate the most basic of equilibrium refinements even under a "best case" scenario (teams that rapidly develop strategic play in games of this sort), it implies that one must rely on learning models, and past empirical research with these models, when predicting equilibrium outcomes.

Suggested Citation

  • Cooper, David J. & Kagel, John H., 2009. "Equilibrium selection in signaling games with teams: Forward induction or faster adaptive learning?," Research in Economics, Elsevier, vol. 63(4), pages 216-224, December.
  • Handle: RePEc:eee:reecon:v:63:y:2009:i:4:p:216-224
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    References listed on IDEAS

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    1. Milgrom, Paul & Roberts, John, 1982. "Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis," Econometrica, Econometric Society, vol. 50(2), pages 443-459, March.
    2. Miller, Ross M & Plott, Charles R, 1985. "Product Quality Signaling in Experimental Markets," Econometrica, Econometric Society, vol. 53(4), pages 837-872, July.
    3. Marco Casari & John C. Ham & John H. Kagel, 2007. "Selection Bias, Demographic Effects, and Ability Effects in Common Value Auction Experiments," American Economic Review, American Economic Association, vol. 97(4), pages 1278-1304, September.
    4. Brandts, Jordi & Holt, Charles A, 1993. "Adjustment Patterns and Equilibrium Selection in Experimental Signaling Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 22(3), pages 279-302.
    5. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 179-221.
    6. David J. Cooper & John H. Kagel, 2005. "Are Two Heads Better Than One? Team versus Individual Play in Signaling Games," American Economic Review, American Economic Association, vol. 95(3), pages 477-509, June.
    7. Cooper, David J & Garvin, Susan & Kagel, John H, 1997. "Adaptive Learning vs. Equilibrium Refinements in an Entry Limit Pricing Game," Economic Journal, Royal Economic Society, vol. 107(442), pages 553-575, May.
    8. Brandts, Jordi & Holt, Charles A, 1992. "An Experimental Test of Equilibrium Dominance in Signaling Games," American Economic Review, American Economic Association, vol. 82(5), pages 1350-1365, December.
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    Cited by:

    1. Morone, Andrea & Nuzzo, Simone & Caferra, Rocco, 2016. "The Dollar Auction Game: A laboratory comparison between Individuals and Groups," MPRA Paper 72608, University Library of Munich, Germany.
    2. Besedes, Tibor & Deck, Cary & Quintanar, Sarah & Sarangi, Sudipta & Shor, Mikhael, 2011. "Free-Riding and Performance in Collaborative and Non-Collaborative Groups," MPRA Paper 33948, University Library of Munich, Germany.
    3. Gary Charness & David Cooper & Zachary Grossman, 2015. "Silence is Golden: Team Problem Solving and Communication Costs," Working Papers wp2018_02_01, Department of Economics, Florida State University, revised Jan 2018.
    4. Charness, Gary & Cooper, David & Grossman, Zachary, 2015. "Silence is Golden: Â Communication Costs and Team Problem Solving," University of California at Santa Barbara, Economics Working Paper Series qt3n25b620, Department of Economics, UC Santa Barbara.

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