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Type | Working Paper |
Scope | Discipline-based scholarship |
Title | An Application of Global Games to Signalling Model |
Organization Unit | |
Authors |
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Language |
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Institution | University of Zurich |
Series Name | Working paper series / Institute for Empirical Research in Economics |
Number | No. 223 |
ISSN | 1424-0459 |
Date | 2006 |
Abstract Text | In a first attempt to apply the global games methodology tonsignalling games, Ewerhart and Wichardt (2004) analyse a beer-quiche type signalling game with additional imperfect information about the preferences of the receiver. Their approach allows them to dismiss the unreasonable pool-ning on quiche equilibrium. This paper revisits their example and discusses how an extension of the set of strategies for the sender affects the analysis. Interestingly, for an extended beer-quiche game, a unique equilibrium is selected while two equilibria are consistent with the Intuitive Criterionn(Cho and Kreps, 1987). Apart from the technical analysis, potential economic applications of the results, e.g. in a context of limit pricing and entry deterrence, are indicated. |
Official URL | http://www.econ.uzh.ch/wp.html |
PDF File | Download from ZORA |
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