Garbling of signals and outcome equivalence

Ehud Lehrer, Dinah Rosenberg, Eran Shmaya*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

15 Scopus citations

Abstract

In a game with incomplete information players receive stochastic signals about the state of nature. The distribution of the signals given the state of nature is determined by the information structure. Different information structures may induce different equilibria.Two information structures are equivalent from the perspective of a modeler, if they induce the same equilibrium outcomes. We characterize the situations in which two information structures are equivalent in terms of natural transformations, called garblings, from one structure to another. We study the notion of 'being equivalent to' in relation with three equilibrium concepts: Nash equilibrium, agent normal-form correlated equilibrium and the belief invariant Bayesian solution.

Original languageEnglish
Pages (from-to)179-191
Number of pages13
JournalGames and Economic Behavior
Volume81
Issue number1
DOIs
StatePublished - 2013

Funding

FundersFunder number
United States-Israel Binational Science Foundation2010253

    Keywords

    • Correlated equilibrium
    • D820
    • Garbling
    • Incomplete information
    • Information structure
    • Robustness

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