Stigma, Passing and the Interaction Order: A Game Theoretical Analysis
A “discreditable” person and a stranger play a game with incomplete information that consists of three successive moves. Firstly, Nature determines the type of the discreditable person, “discredited” or “normal,” according to its probability distribution. The type is in the realm of private information: the discreditable person knows his or her type while the stranger cannot gain direct access to it. Secondly, the discreditable person decides whether he or she will provide false information about his- or herself by costly fabrication. Thirdly, the stranger decides whether he or she will talk to the discreditable person.
The discreditable person’s payoff is a function of the fabrication cost, the attractiveness of the fabrication device, and the embarrassment that the both players experience when the interaction order is threatened. The stranger’s payoff is a function of the joy of conversation and the above-mentioned embarrassment.
There are three classes of Perfect Bayesian Equilibria of the game: separating, pooling, and hybrid equilibria. In pooling and hybrid equilibria, passing will be successful. A tentative analysis suggests that the attractiveness of adopting the fabrication device for the “normal” person may be the most important for successful passing.