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Evolutionary Learning in Signalling Games

Author

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  • Hans Jørgen Jacobsen

    (Institute of Economics, University of Copenhagen)

  • Mogens Jensen

    (Institute of Economics, University of Copenhagen)

  • Birgitte Sloth

    (Institute of Economics, University of Copenhagen)

Abstract

We study equilibrium selection by evolutionary learning in monotone signalling games. The learning process is a development of that introduced by Young for static games extended to deal with incomplete information and sequential moves; it thus involves stochastic trembles. For vanishing trembles the process gives rise to strong selection among sequential moves equilibria. If the game has separating equilibria, then in the long run only play according to a specific separating equilibrium, the so-called Riley equilibrium, will be observed frequently. This selection, is stronger than, and only partly in accordance with, traditional selection based on restrictions on "out-of-equilibrium" beliefs.

Suggested Citation

  • Hans Jørgen Jacobsen & Mogens Jensen & Birgitte Sloth, 1998. "Evolutionary Learning in Signalling Games," CIE Discussion Papers 1999-14, University of Copenhagen. Department of Economics. Centre for Industrial Economics, revised Sep 1999.
    • Handle: RePEc:kud:kuieci:1999-14
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    References listed on IDEAS

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    Cited by:

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    2. Ania, Ana B. & Troger, Thomas & Wambach, Achim, 2002. "An evolutionary analysis of insurance markets with adverse selection," Games and Economic Behavior, Elsevier, vol. 40(2), pages 153-184, August.
    3. Elliott O. Wagner, 2013. "The Dynamics of Costly Signaling," Games, MDPI, vol. 4(2), pages 1-19, April.
    4. Daniel Friedman & Nirvikar Singh, 2004. "Vengefulness Evolves in Small Groups," Palgrave Macmillan Books, in: Steffen Huck (ed.), Advances in Understanding Strategic Behaviour, chapter 3, pages 28-54, Palgrave Macmillan.
    5. Ivan Anic & Vladimir Bozin & Branko Uroševic, 2016. "A Signaling Model of University Selection," CESifo Working Paper Series 5741, CESifo.
    6. Voorneveld, Mark & Weibull, Jörgen W., 2004. "Prices and quality signals," SSE/EFI Working Paper Series in Economics and Finance 551, Stockholm School of Economics, revised 06 Jul 2004.

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    More about this item

    Keywords

    monotone signalling games; intuitive criterion; Riley equilibrium; evolutionary learning; separating equilibrium; pooling equilibrium;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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