Articles

Garbling of signals and outcome equivalence

E. LEHRER, Dinah ROSENBERG, E. SHMAYA

Games and Economic Behavior

September 2013, vol. 81, pp.179-191

Departments: Economics & Decision Sciences, GREGHEC (CNRS)

Keywords: Incomplete information, Information structure, Correlated equilibrium, Garbling, Robustness


In a game with incomplete information players receive stochastic signals about the state of nature. The distribution of the signals given the state of nature is determined by the information structure. Different information structures may induce different equilibria.Two information structures are equivalent from the perspective of a modeler, if they induce the same equilibrium outcomes. We characterize the situations in which two information structures are equivalent in terms of natural transformations, called garblings, from one structure to another. We study the notion of ‘being equivalent to’ in relation with three equilibrium concepts: Nash equilibrium, agent normal-form correlated equilibrium and the belief invariant Bayesian solution


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