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Signalling with Many Signals

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  • Engers, Maxim

Abstract

This paper examines a market with asymmetric information where there are many signals available and where both the costs of signaling and the product value may depend on many privately known characteristics. Under a weak condition on the relationship between the marginal cost of increasing the signals and the product value, a separating set exists whereby the value of every seller's product is inferred from the seller's optimal choice of signals. The separating set constructed is Pareto dominant and corresponds to recently proposed equilibrium notions in signaling and screening models. Copyright 1987 by The Econometric Society.

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Bibliographic Info

Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 55 (1987)
Issue (Month): 3 (May)
Pages: 663-74

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Handle: RePEc:ecm:emetrp:v:55:y:1987:i:3:p:663-74

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Citations

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Cited by:
  1. Massimo Giannini, 1997. "Education and Job Market Signalling: A Comment," Game Theory and Information 9704002, EconWPA.
  2. Araujo, Aloisio & Moreira, Humberto & Tsuchida, Marcos, 2011. "Do dividend changes signal future earnings?," Journal of Financial Intermediation, Elsevier, vol. 20(1), pages 117-134, January.
  3. Laurent Linnemer, 2008. "Dissipative Advertising Signals Quality Even Without Repeat Purchases," Working Papers 2008-18, Centre de Recherche en Economie et Statistique.
  4. Manelli, Alejandro M., 1997. "The Never-a-Weak-Best-Response Test in Infinite Signaling Games," Journal of Economic Theory, Elsevier, vol. 74(1), pages 152-173, May.
  5. Guido Sandleris, 2008. "Sovereign Defaults: Information, Investment and Credit," Business School Working Papers 2008-04, Universidad Torcuato Di Tella.
  6. Gottlieb, Daniel & Moreira, Humberto Ataíde & Araújo, Aloísio Pessoa de, 2004. "A model of mixed signals with applications to countersignaling an the GED," Economics Working Papers (Ensaios Economicos da EPGE) 553, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  7. Nick Feltovich & Rick Harbaugh & Ted To, . "Signaling and Countersignaling: A Theory of Understatement," Claremont Colleges Working Papers 1999-21, Claremont Colleges.
  8. Costa, Luis Almeida e & Vasconcelos, Luis, 2008. "Share the Fame or Share the Blame? The Reputational Implications of Partnerships," FEUNL Working Paper Series wp539, Universidade Nova de Lisboa, Faculdade de Economia.
  9. Michael Smart, 1996. "Competitive Insurance Markets with Two Unobservables," Working Papers msmart-96-01, University of Toronto, Department of Economics.
  10. Ettore Damiano & Hao Li & Wing Suen, 2006. "Credible Ratings," Working Papers tecipa-219, University of Toronto, Department of Economics.
  11. Feltovich, N. & Harbaugh, R. & To, T., 1998. "Too Cool for School? A Theory of Counter signaling," The Warwick Economics Research Paper Series (TWERPS) 518, University of Warwick, Department of Economics.
  12. Sibert, Anne, 2006. "Is Central Bank Transparency Desirable?," CEPR Discussion Papers 5641, C.E.P.R. Discussion Papers.
  13. Massimo Giannini, 1999. "Education and Job market signalling: How robust is the nexus?," Working Papers 35, University of Rome La Sapienza, Department of Public Economics.
  14. Clements, Matthew T., 2011. "Low quality as a signal of high quality," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 5(5), pages 1-22.
  15. Silvia Rossetto, 2008. "The price of rapid exit in venture capital-backed IPOs," Annals of Finance, Springer, vol. 4(1), pages 29-53, January.
  16. Sanghoon Lee, 2007. "The Timing Of Signaling: To Study In High School Or In College?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 785-807, 08.
  17. Peterson, Steven P., 1996. "Some experimental evidence on the efficiency of dividend signaling in resolving information asymmetries," Journal of Economic Behavior & Organization, Elsevier, vol. 29(3), pages 373-388, May.

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