Theoretical Economics 8 (2013), 95–123
Implementation of communication equilibria by correlated cheap talk: The two-player case
Peter Vida, Francoise Forges
We show that essentially every communication equilibrium of any finite Bayesian game with two players can be implemented as a strategic form correlated equilibrium of an extended game, in which before choosing actions as in the Bayesian game, the players engage in a possibly infinitely long (but in equilibrium almost surely finite), direct, cheap talk.
Keywords: Bayesian game, cheap talk, communication equilibrium, correlated equilibrium, pre-play communication
JEL classification: C72, D70
Full Text: PRINT VIEW