Evolutionary stability conditions for signaling games with costly signals

The paper investigates the class of signaling games with the following properties: (a) the interests of sender and receiver coincide, (b) different signals incur differential costs, and (c) different events (meanings/types) have different probabilities. Necessary and sufficient conditions are presented for a profile to be evolutionarily stable and neutrally stable, and for a set of profiles to be an evolutionarily stable set. The main finding is that a profile belongs to some evolutionarily stable set if and only if a maximal number of events can be reliably communicated. Furthermore, it is shown that under the replicator dynamics, a set of states with a positive measure is attracted to "sub-optimal" equilibria that do not belong to any asymptotically stable set. (c) 2008 Elsevier Ltd. All rights reserved.