D1 Signaling Equilibria with Multiple Signals and a Continuum of Types
Abstract This note extends Cho and Sobel's (J. Econ. Theory50(1990), 381–413) existence and uniqueness results for D1 equilibria of signaling games with multiple signals by (i) specifying that types are drawn from a compact interval, and (ii) invoking a more general incentive monotonicity condition, due to Engers (Econometrica55(1987), 663–674) which extends the usual single-crossing property of one-signal models. For certain classes of payoff functions, the complete-information distortion result of Bagwell and Ramey (Rand J. Econ.19(1988), 59–71) is shown to hold in D1 equilibria of the continuum-type model.Journal of Economic LiteratureClassification Number: D82.