nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2010‒07‒24
two papers chosen by
Walter Frisch
University Vienna

  1. Nash Equilibrium and information transmission coding and decoding rules By Penelope Hernandez; Amparo Urbano Salvador; Jose E. Vila
  2. Information transmission and the emergence of a peculiar trading facility in certain emerging markets By Siddiqi, Hammad

  1. By: Penelope Hernandez (ERI-CES); Amparo Urbano Salvador (ERI-CES); Jose E. Vila (ERI-CES)
    Abstract: The design of equilibrium protocols in sender-receiver games where communication is noisy occupies an important place in the Economic literature. This paper shows that the common way of constructing a noisy channel communication protocol in Information Theory does not necessarily lead to a Nash equilibrium. Given the decoding scheme, it may happen that, given some state, it is better for the sender to transmit a message that is different from that prescribed by the codebook. Similarly, when the sender uses the codebook as prescribed, the receiver may sometimes prefer to deviate from the decoding scheme when receiving a message.
    Keywords: Noisy channel, Shannon's Theorem, sender-receiver games, Nash equilibrium
    JEL: C72 C02
    Date: 2010–07
  2. By: Siddiqi, Hammad
    Abstract: A peculiar carry over transaction facility has been associated with emerging markets of India and Pakistan. We show that the trading facility can be considered a market response to the information gaps in these markets. Information can be credibly transmitted through this trading facility. Hence, the emergence of such a trading facility is, perhaps, an example of a creative market response to information problems.
    Keywords: Information Asymmetry; Information Transmission; Emerging Markets; Perfect Bayesian Equilibria; Badla Finance
    JEL: N20 D82 G10 D00
    Date: 2010–04–11

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