WebTo understand why divinity is helpful, you should understand another refinement first. Perhaps the most widely used refinement is Cho & Kreps (1987) "Intuitive Criterion"(IC). In a standard two-type Spence signaling model, IC eliminates all but one equilibrium, the least-cost separating one (Riley outcome). WebBut the Cho-Kreps intuitive criterion eliminates all pooling equilibria. In the same game, there is also a continuum of separating equilibria , but the intuitive criterion eliminates all the separating equilibria except for the most efficient one -- the one where low-ability types are exactly indifferent between acquiring the amount of ...

Reconsidering Spence: Signaling and the Allocation of …

Webthe Cho and Kreps Intuitive Criterion, apply in the usual way. However, if these two types do observe their different values to the receiver, then the Intuitive Criterion is unable to rank equilibria. The reason is that if one of the two types likes a deviation, the other also likes it, hence no deviation is credible by a single type. This is ... WebMar 21, 2011 · The paper presents an intuitive explanation of the Cho and Kreps’ (1987) Intuitive Criterion, and the Banks and Sobel’s (1987) Divinity Criterion (also referred as … low income houses for rent in riverside ca

The Cho-Kreps Intuitive Criterion - GitHub Pages

WebWe present conditions under which all equilibria satisfying the Cho-Kreps intuitive criterion involve unemployment. However, there always exist budget balancing wage subsidies and taxes that eliminate unemployment. Also, for any unemployment equilibrium, either there always exists a set of Pareto improving wage taxes and subsidies, or we give ... WebJun 1, 1993 · The Intuitive Criterion presented by Cho and Kreps (1987) eliminates many of these Nash equilibria by restricting the market's posterior probabili- ties of out-of-equilibrium investment levels. We explain the application of … WebJul 31, 2015 · In-Koo Cho 1, David M. Kreps 2 ... We use the intuitive criterion of Cho and Kreps (1987) ... we will see that this game bears a similarity to models of reputation-building, a la Kreps and Wilson (1982) and Milgrom and Roberts (1982), ... jason bourne hockey