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Mixed Strategy Nash Equilibria in Signaling Games

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DOI: 10.4236/tel.2013.31009    4,994 Downloads   9,019 Views  

ABSTRACT

Signaling games are characterized by asymmetric information where the more informed player has a choice about what information to provide to its opponent. In this paper, decision trees are used to derive Nash equilibrium strategies for signaling games. We address the situation where neither player has any pure strategies at Nash equilibrium, i.e. a purely mixed strategy equilibrium. Additionally, we demonstrate that this approach can be used to determine whether certain strategies are part of a Nash equilibrium containing dominated strategies. Analyzing signaling games using a decision-theoretic approach allows the analyst to avoid testing individual strategies for equilibrium conditions and ensures a perfect Bayesian solution.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

B. R. Cobb, A. Basuchoudhary and G. Hartman, "Mixed Strategy Nash Equilibria in Signaling Games," Theoretical Economics Letters, Vol. 3 No. 1, 2013, pp. 52-64. doi: 10.4236/tel.2013.31009.

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