Signaling and countersignaling
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School of Business |
Bachelor's thesis
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Authors
Date
2018
Department
Major/Subject
Mcode
Degree programme
Taloustiede
Language
en
Pages
12
Series
Abstract
Signaling is relevant for markets and games with incomplete information, and it occurs when a player believes he can improve his payoff by a decision to signal. In order to study signaling games, it is meaningful to seek possible equilibria. Perfect Bayesian equilibrium is a solution concept that can be used for this. Related to strategies of players, countersignaling is a phenomenon in which a player of higher quality invests less in signals than a player of lower quality. This kind of equilibrium requires an existence of additional noisy information that can change the interpretation of signals.Description
Thesis advisor
Mustonen, MikkoKeywords
signaling, countersignaling, game theory, perfect Bayesian equilibrium