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Signaling Games with Costly Monitoring

Theoretical Economics 2023-02-03 v1 Computer Science and Game Theory

Abstract

If in a signaling game the receiver expects to gain no information by monitoring the signal of the sender, then when a cost to monitor is implemented he will never pay that cost regardless of his off-path beliefs. This is the argument of a recent paper by T. Denti (2021). However, which pooling equilibrium does a receiver anticipate to gain no information through monitoring? This paper seeks to prove that given a sufficiently small cost to monitor any pooling equilibrium with a non-zero index will survive close to the original equilibrium.

Keywords

Cite

@article{arxiv.2302.01116,
  title  = {Signaling Games with Costly Monitoring},
  author = {Reuben Bearman},
  journal= {arXiv preprint arXiv:2302.01116},
  year   = {2023}
}

Comments

19 pages, 6 figures