A Minority-Proof Cheap-Talk Protocol
13 Pages Posted: 13 Mar 2008 Last revised: 30 Sep 2011
Date Written: February 26, 2008
This paper analyzes the implementation of correlated equilibria that are immune to joint deviations of coalitions by cheap-talk protocols. We construct a universal cheap-talk protocol (a polite protocol that uses only 2-player private channels) that is resistant to deviations of fewer than half the players, and using it, we show that a large set of correlated equilibria can be implemented as Nash equilibria in the extended game with cheap-talk. Furthermore, we demonstrate that in general there is no cheap-talk protocol that is resistant for deviations of half the players.
Keywords: non-cooperative games, cheap-talk, correlated equilibrium, strong equilibrium, coalition-proof equilibrium, fault-tolerant distributed computation
JEL Classification: C72
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