Economics Dictionary of ArgumentsHome
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Bayesianism on Communication Equilibria - Dictionary of Arguments
Kranton I 427 Communication Equilibria/Beliefs/Agents/Bayesianism: On the equilibrium path, the posteriors are formed by Bayes’ rule; m = 0 is created only by unbiased agents, the probability that the originator of message m = 1 is biased is b, and receiving no message occurs in the event no agent receives a signal and hence the prior is maintained. Off the equilibrium path, no message is received in which case we set the posterior to be equal to the prior. Turning to agents’ strategies to create messages, given these posterior beliefs, no unbiased agent who receives the signal would choose to send an untrue message (…), since this action will decrease the number of agents who vote for the outcome corresponding to the true state. No biased agent has an incentive to deviate and choose m = ∅ or m = 0, (>Terminology/Kranton) since these actions will decrease the posterior belief that 1 is the true state. Consider the possibility that in equilibrium a strict subset of unbiased agents send truthful messages. One of the unbiased agents who does not send a message or an untruthful one would have an incentive to deviate and send a truthful message, since it increases the likelihood of the correct outcome. (…) we see that communication occurs in the public broadcast model if and only if the proportion of biased agents in the population is sufficiently low. This equilibrium maximizes unbiased agents’ expected payoffs. There exists an equilibrium in which no unbiased agents broadcast messages, but there exists no equilibrium in which only a strict subset of unbiased agents broadcast truthful messages. Francis Bloch, Gabrielle Demange & Rachel Kranton, 2018. "Rumors And Social Networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 421-448._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Bayesianism Kranton I Rachel E. Kranton Francis Bloch Gabrielle Demange, Rumors And Social Networks 2018 Kranton II Rachel E. Kranton George A. Akerlof Identity Economics: How Our Identities Shape Our Work, Wages, and Well-Being Princeton 2011 |
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> Counter arguments against Bayesianism
> Counter arguments in relation to Communication Equilibria
