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Signaling game

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In game theory, a signaling game is a type of a dynamic Bayesian game.

An extensive form representation of a signaling game In game theory, a signaling game is a type of a dynamic Bayesian game.[1] The essence of a signaling game is that one player takes action, the signal, to convey information to another player. Sending the signal is more costly if the information is false. A manufacturer, for example, might provide a warranty for its product to signal to consumers that it is unlikely to break down. A traditional example is a worker who acquires a college degree not because it increases their skill but because it conveys their ability to employers. A…

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