Regular ArticleRepeated Games with Bounded Entropy
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Persuasion with limited communication capacity
2019, Journal of Economic TheoryCitation Excerpt :Our finding is that the noise and limitations in communication induce a shadow cost measured by the mutual information. Entropy and mutual information appear endogenously in several papers on repeated games where players have bounded rationality (Neyman and Okada, 1999, 2000), are not able to freely randomize their actions (Gossner and Vieille, 2002), or observe actions imperfectly (Gossner and Tomala, 2006, 2007). A related paper is Gossner et al. (2006), henceforth GHN, who also consider a sender-receiver game.
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2019, Games and Economic BehaviorCitation Excerpt :This section presents some information-theoretic notions that are used in the proof. In a sequence of papers, Neyman and Okada (Neyman and Okada 2000, 2009, Neyman 2008) developed a methodology for analyzing repeated games with bounded memory. A key idea of theirs is captured in the following lemma whose proof appears in Peretz (2012, Lemma 4.2).
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