Disclosure and Information Transfer in Signaling Games

Abstract

One of the major puzzles in evolutionary theory is how communication and information transfer are possible when the interests of those involved conflict. Perfect information transfer seems inevitable if there are physical constraints, which limit the signal repertoire of an individual, effectively making bluffing an impossibility. This, I argue, is incorrect. Unfakeable signals by no means guarantee information transfer. I demonstrate the existence of a so-called pooling equilibrium and discuss why the traditional argument for perfect information transfer (Frank’s full disclosure principle) does not hold in all cases. Additionally, I demonstrate that deception is possible at equilibrium despite the fact that signals are impossible to fake.