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Economic Theory

, Volume 23, Issue 2, pp 283–320 (2004) | Cite as

Computationally restricted unmediated talk under incomplete information

  • Amparo UrbanoEmail author
  • Jose E. Vila
Original Paper

Summary.

We show the role of unmediated talk with computational complexity bounds as both an information transmission and a coordination device for the class of two-player games with incomplete information and rational parameters. We prove that any communication equilibrium payoff of such games can be reached as a Bayesian-Nash equilibrium payoff of the game extended by a two phase universal mechanism of interim computationally restricted pre-play communication. The communication protocols are designed with the help of modern cryptographic tools. A familiar context in which our results could be applied is bilateral trading with incomplete information.

Keywords and Phrases:

Computational complexity Unmediated communication Correlated equilibrium Bayesian-Nash equilibrium. 

Copyright information

© Springer-Verlag Berlin/Heidelberg 2004

Authors and Affiliations

  1. 1.Departamento de Análisis EconómicoFacultad de Ciencias Económicas y EmpresarialesValenciaSPAIN

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