Working Paper No. 450

Neutrally Stable Outcomes in Cheap Talk Games

Published: March 1996Pages: 25Keywords: GAME; THEORYJEL-codes: C7; C70; C73

Neutrally Stable Outcomes in Cheap Talk Games Abhijit Banerjee and Jörgen W. Weibull

 

This paper examines equilibrium and stability in symmetric two-player cheap-talk games. In particular, we characterize the set of neutrally stable outcomes in finite cheap-talk 2 x 2 coordination games. This set is finite and functionally independent of risk-dominance relations. As the number of messages goes to infinity, this set expands to a countable limit set that has exactly one cluster point, the Pareto efficient Nash equilibrium payoff. In contrast, the set of outcomes that are strategically stable for some finite message set is shown to be dense in the interval spanned by the Nash equilibrium payoffs of the game. We also show that the limit set of neutrally stable outcomes coincides with the set of neutrally stable outcomes for countable infinite message sets.

The Oxford Handbook of Economic and Institutional Transparency

Most recent book

Framsida-2014-The-Oxford-Handbook-of-Economic-and-Institutional-Transparency

Edited by Lars Oxelheim, IFN and Lund University and Jens Forssbaeck.

The publication is divided into three broad themes. The first section addresses transparency in different areas of economic policy. The second covers institutional transparency and explores the role of transparency in market integration and regulation. The third focuses on corporate transparency.

Events

Seminars organized by IFN

 

To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se