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Equilibrium Selection in Cheap Talk Games: ACDC rocks when Other Criteria remain silent

Author

Listed:
  • Adrian de Groot Ruiz

    (University of Amsterdam)

  • Theo Offerman

    (University of Amsterdam)

  • Sander Onderstal

    (University of Amsterdam)

Abstract

This discussion paper resulted in a publication in 'Games and Economic Behavior' , 2015, 91, 14-25. Currently no refinement exists that successfully selects equilibria across a wider range of Cheap Talk games. We propose a generalization of refinements based on credible deviations, such as neologism proofness and announcement proofness. According to our Average Credible Deviation Criterion (ACDC), the stability of an equilibrium is determined by the frequency and the size of credible deviations. In our experiment, we find support for the relevance of credible deviations. In addition, we find support for ACDC in settings where other criteria remain silent. ACDC also explains results from previous experiments.

Suggested Citation

  • Adrian de Groot Ruiz & Theo Offerman & Sander Onderstal, 2011. "Equilibrium Selection in Cheap Talk Games: ACDC rocks when Other Criteria remain silent," Tinbergen Institute Discussion Papers 11-037/1, Tinbergen Institute, revised 31 Oct 2011.
    • Handle: RePEc:tin:wpaper:20110037
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    References listed on IDEAS

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    More about this item

    Keywords

    cheap talk; neologism proofness; announcement proofness; credible deviation; ACDC; experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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