Choosing Among Signalling Equilibria in Lobbying Games

Eric Bennett Rasmusen, Kelley School of Business, Indiana University

Abstract

Randolph Sloof has written a comment on the lobbying-as-signalling model in Rasmusen (1993) in which he points out an equilibrium I missed and criticizes my emphasis on a particular separating equilibrium. In this response, I discuss how to interpret multiple equilibria in games and how to interpret mixed strategy equilibria in which two types of player with identical incentives must pick different mixing probabilities.