Sequential Equilibria in Bayesian Games with Communication

40 Pages Posted: 5 Dec 2005

See all articles by Dino Gerardi

Dino Gerardi

Yale University - Cowles Foundation

Roger Myerson

University of Chicago - Department of Economics

Date Written: December 2005

Abstract

We study the effects of communication in Bayesian games when the players are sequentially rational but some combinations of types have zero probability. Not all communication equilibria can be implemented as sequential equilibria. We define the set of strong sequential equilibria (SSCE) and characterize it. SSCE differs from the concept of sequential communication equilibrium (SCE) defined by Myerson (1986) in that SCE allows the possibility of trembles by the mediator. We show that these two concepts coincide when there are three or more players, but the set of SSCE may be strictly smaller than the set of SCE for two-player games.

Keywords: Bayesian games, Communication, Communication equilibrium, Sequential communication equilibrium

JEL Classification: C72, D82

Suggested Citation

Gerardi, Dino and Myerson, Roger B., Sequential Equilibria in Bayesian Games with Communication (December 2005). Cowles Foundation Discussion Paper No. 1542, Available at SSRN: https://ssrn.com/abstract=868503

Dino Gerardi (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-3562 (Phone)
203-432-5779 (Fax)

Roger B. Myerson

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

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