an:00934146
Zbl 0856.90137
Manelli, Alejandro M.
Cheap talk and sequential equilibria in signaling games
EN
Econometrica 64, No. 4, 917-942 (1996).
00033200
1996
j
91A05 91A20
infinite action-games; infinite signaling games; sequential equilibria; cheap talk
Summary: Well-behaved infinite signaling games may have no sequential equilibria. We prove that adding cheap talk to these games ``solves'' the nonexistence problem: the limit of sequential equilibrium outcomes of finite approximating games is a sequential equilibrium outcome of the cheap-talk extension of the limit game. In addition, when the signaling space has no isolated points, any cheap-talk sequential equilibrium outcome can be approximated by a sequential \(\varepsilon\)-equilibrium of the game without cheap talk.