TY - JOUR
T1 - Signaling and mediation in games with common interests
AU - Lehrer, Ehud
AU - Rosenberg, Dinah
AU - Shmaya, Eran
PY - 2010/3
Y1 - 2010/3
N2 - Players who have a common interest are engaged in a game with incomplete information. Before playing they get differential stochastic signals that depend on the actual state of nature. These signals provide the players with partial information about the state of nature and may also serve as a means of correlation. Different information structures induce different outcomes. An information structure is better than another, with respect to a certain solution concept, if the highest solution payoff it induces is at least that induced by the other structure. This paper characterizes the situation where one information structure is better than another with respect to various solution concepts: Nash equilibrium, strategic-normal-form correlated equilibrium, agent-normal-form correlated equilibrium and belief-invariant Bayesian solution. These solution concepts differ from one another in the scope of communication allowed between the players. The characterizations use maps that stochastically translate signals of one structure to signals of another.
AB - Players who have a common interest are engaged in a game with incomplete information. Before playing they get differential stochastic signals that depend on the actual state of nature. These signals provide the players with partial information about the state of nature and may also serve as a means of correlation. Different information structures induce different outcomes. An information structure is better than another, with respect to a certain solution concept, if the highest solution payoff it induces is at least that induced by the other structure. This paper characterizes the situation where one information structure is better than another with respect to various solution concepts: Nash equilibrium, strategic-normal-form correlated equilibrium, agent-normal-form correlated equilibrium and belief-invariant Bayesian solution. These solution concepts differ from one another in the scope of communication allowed between the players. The characterizations use maps that stochastically translate signals of one structure to signals of another.
UR - http://www.scopus.com/inward/record.url?scp=75349107099&partnerID=8YFLogxK
U2 - 10.1016/j.geb.2009.08.007
DO - 10.1016/j.geb.2009.08.007
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AN - SCOPUS:75349107099
SN - 0899-8256
VL - 68
SP - 670
EP - 682
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 2
ER -