- Equilibrium selection in cheap talk games: ACDC rocks when other criteria remain silent
- Number of pages
- Amsterdam: Center for Research in Experimental Economics and Political Decision making
- CREED working paper
- Document type
- Working paper
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
Currently no refinement exists that successfully selects equilibria across a wider range of Cheap Talk games. We propose a generalization of criteria based on credible deviations, such as neologism proofness and announcement proofness. According to our Average Credible Deviation Criterion (ACDC), the stability of an equilibrium is determined by the frequency and the size of credible deviations. In our experiment, we find support for the relevance of credible deviations. In addition, we find support for ACDC in settings where other criteria remain silent. ACDC also explains results from previous experiments.
If you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library, or send a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible.