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G
AME
T
HEORY IN THE
S
OCIAL
S
CIENCES
Political Science 135/Economics 110
Hand out on:
The Intuitive Criterion
The Intuitive Criterion is a way of throwing out implausible Perfect Bayesian equilibria
of signaling games.
If an equilibrium fails to pass this criterion we will disregard it as a
prediction about how the signaling game will be played.
The parallel here is with Nash
equilibria and subgame perfect equilibria.
As we have seen, some Nash equilibria were not
plausible predictions about the way a game would be played, and we disregarded them if these
Nash equilibria were not subgame perfect.
In the same spirit, we will disregard perfect Bayesian
equilibria if they do not also pass the Intuitive Criterion.
Whether or not an equilibrium passess the intuitive criterions is at issue
only in pooling
equilibria of a signaling game.
Suppose every type pools in an equilibrium by taking the same
action
A
1
(e.g. “not going to college” in the Spence signaling model) and no one takes action
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 Fall '10
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