seniorGame Theory
What is signaling equilibrium refinement in Game Theory?
Updated May 16, 2026
Short answer
Signaling equilibrium describes stable outcomes in games where informed players send signals to uninformed players.
Deep explanation
A signaling equilibrium consists of sender strategies, receiver beliefs, and receiver actions that are mutually consistent under Bayes rule. It refines Bayesian Nash equilibrium by enforcing belief consistency and credibility of signals.
Real-world example
Used in job markets where education acts as a signal of productivity.
Common mistakes
- Assuming signals always truthfully reveal type.
Follow-up questions
- What is belief consistency?
- What is separating equilibrium?