NEIGHBORHOOD STABILITY IN SENDER-RECEIVER GAMES

This paper characterizes robust outcomes in sender-receiver games. An equilibrium (a retract) is perturbed message persistent (PMP) if it is the limit (Hausdorff limit) of persistent equilibria(persistent retra cts)in perturbed games. In strict common interest games separating equ ilibria are PMP and message invariant equilibria are not PMP. With par tial common interest, there exists a PMP retract which partially separ ates types and message invariant equilibria are not PMP. Under a rich language condition only partially separating equilibria are PMP in par tial common interest games, and there are further results on refinemen ts and games where the sender has a preferred equilibrium. (C) 1996 Ac ademic Press, Inc.