Information Transmission

Abstract

This chapter discusses information transmissions in strategic games. These games deal with games in extensive form where an outside player, an information holder, has some information unknown to the players in the game. The information holder's strategies are various information transmissions available to him. Each one of these strategies induces a new game with the same set of players. The set of all Nash equilibrium points obtained as the unique perfect equilibrium of a game induced by an information transmission is called the inducible set. This set measures the ability of the information holder to change the game. However, the characterization of the inducible sets of a non-zero sum game is far from trivial. The chapter presents the characterization of an inducible set of a two-person non-zero game. It provides an example where basic transmissions of information induce games with multiple and even a continuum of perfect Nash equilibria payoffs. Thus, by the definition, such games do not contribute any point to the inducible set. These multiple equilibrium payoffs are all inducible. Each one of these equilibrium payoffs is the unique Nash equilibrium of a game induced by some transmission of information.