Signaling, Screening, and Core Stability

41 Pages Posted: 11 Mar 2022 Last revised: 25 Aug 2022

See all articles by Roberto Serrano

Roberto Serrano

Brown University

Rajiv Vohra

Brown University - Department of Economics

Yusuke Kamishiro

Kanto Gakuin University - College of Economics

Date Written: January 1, 2022

Abstract

This paper provides a noncooperative approach to core stability in an economy with incomplete information. We study the perfect Bayesian equilibria of an extensive form mechanism that extends the one used by Serrano and Vohra (1997) to implement the core of a complete-information economy. This leads to a version of the core that we refer to as the sequential core, which allows for information flows through proposals that can be viewed as signaling devices and/or screening contracts. Equilibrium refinements are then used to provide justifications for the coarse core and the fine core.

Keywords: core, incomplete information, perfect Bayesian equilibrium, signaling, screening, Nash program.

JEL Classification: C71, C72, D51

Suggested Citation

Serrano, Roberto and Vohra, Rajiv and Kamishiro, Yusuke, Signaling, Screening, and Core Stability (January 1, 2022). Available at SSRN: https://ssrn.com/abstract=4009212 or http://dx.doi.org/10.2139/ssrn.4009212

Roberto Serrano (Contact Author)

Brown University ( email )

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Rajiv Vohra

Brown University - Department of Economics ( email )

Box B
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United States
401-863-3030 (Phone)
401-863-1970 (Fax)

Yusuke Kamishiro

Kanto Gakuin University - College of Economics ( email )

1-50-1 Mutsuura-higashi
Kanazawa-ku
Yokohama, Kanagawa 236-8501
Japan

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