Bequests as Signals: An Explanation for the Equal Division Puzzle

Credulity, lies, and costly talk

“…Rather than formally pursuing refinements, in this paper we have simply followed the common practice of focusing on separating equilibria in costly signaling games when they exist. However, the arguments in Kartik [15] suggest that a refinement such as monotone D1 equilibrium (Bernheim and Severinov [2]) will isolate separating equilibria in our model. It is also worth noting that we have confined our attention to differentiable equilibria.…”

“…1 In addition, there appear to be systematic differences across investors in their responses to the same recommendation. 2 These findings suggest that some investors might be credulous and naively believe what they hear.…”

“…(−∞, +∞) and U (x,x, m) can be represented as in (2), with the functions U S (y, x, b) and G (y, x, b) We conclude this section by reporting an example of information transmission to a single receiver who may be fully naive, with the state space being unbounded both above and below. The sender's expected utility from sending message m is thus…”

Reliability and Responsibility: a Theory of Endogenous Commitment

“…In this section we present an equilibrium refinement, introduced by Bernheim and Severinov (2003) and studied also in Kartik (2005) for cheap talk extensions of one round signalling games. Differently from Kartik (2005) in our model there are two senders and receiver's type is unknown.…”

“…To refine out-of-equilibrium beliefs with regard to totally unexpected policies. we use a refinement introduced by Bernheim and Severinov (2003) (see also Kartik (2005)) The refinement, called monotonic D1 Criterion adapts to monotonic environments the D1 criterion (Cho and Kreps (1987)). We characterize the set of these equilibria for any degree of candidates' policy implication.…”