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A tree formulation for signaling games

Author

Listed:
  • Dassiou, X.
  • Glycopantis, D.

Abstract

We provide a detailed presentation and complete analysis of the sender/receiver Lewis signaling game using a game theory extensive form, decision tree formulation. The analysis employs well established game theory ideas and concepts. We establish the existence of four perfect Bayesian equilibria in this game. We explain which equilibrium is the most likely to prevail. Our explanation provides an essential step for understanding the formation of a language convention. Further, we discuss the informational content of such signals and calibrate a more detailed definition of a true (“correct”) signal in terms of the payoffs of the sender and the receiver.

Suggested Citation

  • Dassiou, X. & Glycopantis, D., 2011. "A tree formulation for signaling games," Working Papers 11/07, Department of Economics, City St George's, University of London.
    • Handle: RePEc:cty:dpaper:11/07
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    File URL: https://openaccess.city.ac.uk/id/eprint/1455/1/A_Tree_Formulation_for_Signaling_Games.pdf
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    References listed on IDEAS

    as
    1. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
    2. Jeffrey Barrett, 2009. "The Evolution of Coding in Signaling Games," Theory and Decision, Springer, vol. 67(2), pages 223-237, August.
    3. repec:cup:cbooks:9780521555838 is not listed on IDEAS
    4. Binmore, Ken, 2007. "Playing for Real: A Text on Game Theory," OUP Catalogue, Oxford University Press, number 9780195300574.
    5. repec:bla:econom:v:67:y:2000:i:267:p:375-98 is not listed on IDEAS
    6. Welch, Ivo, 1992. "Sequential Sales, Learning, and Cascades," Journal of Finance, American Finance Association, vol. 47(2), pages 695-732, June.
    7. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    Full references (including those not matched with items on IDEAS)

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