Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2011-02-14 Revision-Date: 2011-10-31 Number: 11-037/1 Author-Name: Adrian de Groot Ruiz Author-Workplace-Name: University of Amsterdam Author-Name: Theo Offerman Author-Workplace-Name: University of Amsterdam Author-Name: Sander Onderstal Author-Workplace-Name: University of Amsterdam Title: Equilibrium Selection in Cheap Talk Games: ACDC rocks when Other Criteria remain silent Abstract: This discussion paper resulted in a publication in 'Games and Economic Behavior', 2015, 91, 14-25.
Currently no refinement exists that successfully selects equilibria across a wider range of Cheap Talk games. We propose a generalization of refinements based on credible deviations, such as neologism proofness and announcement proofness. According to our Average Credible Deviation Criterion (ACDC), the stability of an equilibrium is determined by the frequency and the size of credible deviations. In our experiment, we find support for the relevance of credible deviations. In addition, we find support for ACDC in settings where other criteria remain silent. ACDC also explains results from previous experiments. Classification-JEL: C72, C92, D82, D83 Keywords: cheap talk, neologism proofness, announcement proofness, credible deviation, ACDC, experiment File-Url: http://papers.tinbergen.nl/11037.pdf File-Format: application/pdf File-Size: 379256 bytes Handle: RePEc:tin:wpaper:20110037