On the structure of equilibrium strategies in dynamic Gaussian signaling games

Muhammed O. Sayin, Emrah Akyol, Tamer Basar

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

This paper analyzes a finite horizon dynamic signaling game motivated by the well-known strategic information transmission problems in economics. The mathematical model involves information transmission between two agents, a sender who observes two Gaussian processes, state and bias, and a receiver who takes an action based on the received message from the sender. The players incur quadratic instantaneous costs as functions of the state, bias and action variables. Our particular focus is on the Stackelberg equilibrium, which corresponds to information disclosure and Bayesian persuasion problems in economics. Prior work solved the static game, and showed that the Stackelberg equilibrium is achieved by pure strategies that are linear functions of the state and the bias variables. The main focus of this work is on the dynamic (multi-stage) setting, where we show that the existence of a pure strategy Stackelberg equilibrium, within the set of linear strategies, depends on the problem parameters. Surprisingly, for most problem parameters, a pure linear strategy does not achieve the Stackelberg equilibrium which implies the existence of a trade-off between exploiting and revealing information, which was also encountered in several other asymmetric information games.

Original languageEnglish (US)
Title of host publication2016 IEEE Conference on Control Applications, CCA 2016
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages749-754
Number of pages6
ISBN (Electronic)9781509007554
DOIs
StatePublished - Oct 10 2016
Event2016 IEEE Conference on Control Applications, CCA 2016 - Buenos Aires, Argentina
Duration: Sep 19 2016Sep 22 2016

Publication series

Name2016 IEEE Conference on Control Applications, CCA 2016

Other

Other2016 IEEE Conference on Control Applications, CCA 2016
CountryArgentina
CityBuenos Aires
Period9/19/169/22/16

ASJC Scopus subject areas

  • Control and Optimization
  • Modeling and Simulation

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    Sayin, M. O., Akyol, E., & Basar, T. (2016). On the structure of equilibrium strategies in dynamic Gaussian signaling games. In 2016 IEEE Conference on Control Applications, CCA 2016 (pp. 749-754). [7587908] (2016 IEEE Conference on Control Applications, CCA 2016). Institute of Electrical and Electronics Engineers Inc.. https://doi.org/10.1109/CCA.2016.7587908