Format:
1 Online-Ressource (circa 16 Seiten)
,
Illustrationen
Series Statement:
Economics no. 2017, 19 (April 28, 2017)
Content:
Delacroix and Shi (Pricing and signaling with frictions, Journal of Economics Theory 2013) study a model featuring buyers with unit demands and sellers with unit supplies. The sellers may produce a high- or a low-quality good. The buyers get a signal about quality but the signalling technology is quite specific; the signal is either completely revealing or uninformative. The author studies the same model with a symmetric signalling technology where high and low signals are always got with positive probability. As a consequence, whenever high-quality goods are produced also low-quality goods are produced. Instead of price posting the author studies trading by auctions. There are two equilibria, and the author quantifies the efficiency loss due to asymmetric information.
Language:
English
Keywords:
Arbeitspapier
;
Graue Literatur
