The Structure of Signals: Causal Interdependence Models for Games of Incomplete Information

Details The Structure of Signals: Causal Interdependence Models for Games of Incomplete Information The Structure of Signals: Causal Interdependence Models for Games of Incomplete Information

2012-02-14

arxiv.org/abs/1202.3768v1

Computer Science

Computer Science and Game Theory

Scientific paper

Traditional economic models typically treat private information, or signals, as generated from some underlying state. Recent work has explicated alternative models, where signals correspond to interpretations of available information. We show that the difference between these formulations can be sharply cast in terms of causal dependence structure, and employ graphical models to illustrate the distinguishing characteristics. The graphical representation supports inferences about signal patterns in the interpreted framework, and suggests how results based on the generated model can be extended to more general situations. Specific insights about bidding games in classical auction mechanisms derive from qualitative graphical models.

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