What is separating equilibrium in game theory?

What is separating equilibrium in game theory?

A separating equilibrium describes one type of perfect Bayesian equilibria that may arise in signaling games. A separating equilibrium is an equilibrium where the first player’s action fully reveals her private information.

What is a single-crossing property?

In economics, the single-crossing condition or single-crossing property refers to how the probability distribution of outcomes changes as a function of an input and a parameter.

How do you prove single-crossing?

When there are only two outcomes, A = {a1,a2}, it is straightforward to check that SCED holds if and only if v(a, θ) has single-crossing differences, i.e., if and only if v(a1,θ)−v(a2,θ) is single crossing.

What is a signaling equilibrium?

In equilibrium, in order for the signalling model to hold, the employer must recognize the signal and pay the corresponding wage and this will result in the workers self-sorting into the two groups.

What is Signalling in game theory?

In game theory, a signaling game is a simple type of a dynamic Bayesian game. The essence of a signalling game is that one player takes an action, the signal, to convey information to another player, where sending the signal is more costly if they are conveying false information.

What are the differences between pooling and separating equilibrium?

A pooling equilibrium is an equilibrium in which all types of sender send the same message. A separating equilibrium is an equilibrium in which all types of sender send different messages.

What is a separating strategy?

-each players’ strategies maximize expected payoff given beliefs Page 20 Pooling vs. separating equilibria When player 1 plays the same action, regardless of his type, it is called a pooling strategy. When player 1 plays different actions, depending on his type, it is called a separating strategy.

What is the difference between a separating equilibrium and a pooling equilibrium?

What is a pooling equilibrium in economics?

An equilibrium in which agents with differing characteristics choose the same action. For example, in an insurance market a pooling equilibrium involves high-risk and low-risk agents choosing the same insurance contract. See also separating equilibrium. From: pooling equilibrium in A Dictionary of Economics »

What signals are chosen in a pooling equilibrium?

In a pooling equilibrium, senders of different types all choose the same signal. This means that the signal does not give any information to the receiver, so the receiver’s beliefs are not updated after seeing the signal. In a separating equilibrium, senders of different types always choose different signals.

What is game pooling?

Pool is a classification of cue sports played on a table with six pockets along the rails , into which balls are deposited. There are also hybrid games combining aspects of both pool and carom billiards, such as American four-ball billiards, bottle pool, cowboy pool, and English billiards.