The money-burning refinement: With an application to a political signalling game

@article{Gersbach2004TheMR,
  title={The money-burning refinement: With an application to a political signalling game},
  author={Hans Gersbach},
  journal={Int. J. Game Theory},
  year={2004},
  volume={33},
  pages={67-87}
}
We define an equilibrium refinement in signalling games by allowing agents to refine the game by burning money whenever they can act. We apply the refinement in a model where the public is unsure about the ability of an agent, say a government, to foresee the effects of long-term decisions. A government with ample information about the consequences of… CONTINUE READING