Correlated Equilibria in Sender-Receiver Games∗

It is shown that the efficiency bound for communication equilibria identified by Goltsman, Hörner, Pavlov and Squintani [13] in the leading example of the Crawford-Sobel model can be obtained with strategy-correlated equilibria. Thus, unlike in earlier implementations of this bound, there is no need for communication to a mediator, for the sender’s message to the receiver to be garbled, or for repeated message exchanges between sender and receiver. The occasional mismatch between the encoding and decoding rules used by sender and receiver in a correlated equilibrium can be interpreted as uncertainty about language use. ∗I am grateful to Maria Goltsman and Joel Sobel for comments.