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Implementation of Communication Equilibria by Correlated Cheap Talk: The Two-Player Case

  • Péter Vida
  • Francoise Forges

We show that essentially every communication equilibrium of any finite Bayesian game with two players can be implemented as a strategic form correlated equilibrium of an extended game, in which before choosing actions as in the Bayesian game, the players engage in a pos-sibly infinitely long (but in equilibrium almost surely finite), direct, cheap talk.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3360.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3360
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  1. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
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  8. Forges, F., 1987. "Universal mechanisms," CORE Discussion Papers 1987004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Krishna, Vijay & Morgan, John, 2004. "The art of conversation: eliciting information from experts through multi-stage communication," Journal of Economic Theory, Elsevier, vol. 117(2), pages 147-179, August.
  10. Robert J. Aumann & Sergiu Hart, 2002. "Long Cheap Talk," Discussion Paper Series dp284, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem, revised Nov 2002.
  11. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, June.
  12. Koessler, Frédéric & Forges, Françoise, 2008. "Multistage communication with and without verifiable types," Economics Papers from University Paris Dauphine 123456789/1121, Paris Dauphine University.
  13. Heller, Yuval & Solan, Eilon & Tomala, Tristan, 2012. "Communication, correlation and cheap-talk in games with public information," Games and Economic Behavior, Elsevier, vol. 74(1), pages 222-234.
  14. Ben-Porath, Elchanan, 2003. "Cheap talk in games with incomplete information," Journal of Economic Theory, Elsevier, vol. 108(1), pages 45-71, January.
  15. Ben-Porath, Elchanan, 1998. "Correlation without Mediation: Expanding the Set of Equilibrium Outcomes by "Cheap" Pre-play Procedures," Journal of Economic Theory, Elsevier, vol. 80(1), pages 108-122, May.
  16. Vijay Krishna, R., 2007. "Communication in games of incomplete information: Two players," Journal of Economic Theory, Elsevier, vol. 132(1), pages 584-592, January.
  17. R. Aumann, 2010. "Subjectivity and Correlation in Randomized Strategies," Levine's Working Paper Archive 389, David K. Levine.
  18. Gerardi, Dino, 2004. "Unmediated communication in games with complete and incomplete information," Journal of Economic Theory, Elsevier, vol. 114(1), pages 104-131, January.
  19. José E. Vila & Amparo Urbano, 1999. "- Unmediated Talk Under Incomplete Information," Working Papers. Serie AD 1999-07, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  20. Olivier Gossner & Nicolas Vieille, 2001. "Repeated communication through the mechanism," International Journal of Game Theory, Springer, vol. 30(1), pages 41-60.
  21. Gossner, Olivier & Vieille, Nicolas, 2001. "Repeated Communication Through the Mechanism And," Economics Papers from University Paris Dauphine 123456789/6031, Paris Dauphine University.
  22. Robert J. Aumann, 2010. "Correlated Equilibrium as an expression of Bayesian Rationality," Levine's Working Paper Archive 661465000000000377, David K. Levine.
  23. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, June.
  24. Forges, Francoise, 1990. "Equilibria with Communication in a Job Market Example," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 375-98, May.
  25. Goltsman, Maria & Hörner, Johannes & Pavlov, Gregory & Squintani, Francesco, 2009. "Mediation, arbitration and negotiation," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1397-1420, July.
  26. GOSSNER , Olivier & VIEILLE, Nicolas, 1998. "Repeated communication through the mechanism “andâ€," CORE Discussion Papers 1998056, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  27. Forges, F., 1987. "Can sunspots replace a mediator ?," CORE Discussion Papers 1987045, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  28. Amparo Urbano & Jose E. Vila, 2002. "Computational Complexity and Communication: Coordination in Two-Player Games," Econometrica, Econometric Society, vol. 70(5), pages 1893-1927, September.
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