Divine equilibrium

The Divinity Criterion or Divine Equilibrium or Universal Divinity or D1-Criterion is a refinement of Perfect Bayesian equilibrium in a signaling game.

It is a restriction of receiver's beliefs to the type of senders for whom deviating towards an off-the-equilibrium message could improve his outcome compared to the equilibrium payoff. [1] In addition to the restriction suggested by the Intuitive Criterion, the Divinity Criterion considers only those types which are most likely to send the off-the-equilibrium message.

If more than one sender could benefit from the deviation, the Intuition Criterion assigns equal probabilities for all the senders, whereas the D1-Criterion considers different probabilities.

References

  1. ↑ The Intuitive and Divinity Criterion: Interpretation and Step-by-Step Examples Felix Munoz-Garcia, Ana Espinola-Arredondo, Journal of Industrial Organization Education. Volume 5, Issue 1, Pages 1–20, ISSN (Online) 1935-5041, DOI: 10.2202/1935-5041.1024, March 2011
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