When are Signals Complements or Substitutes?
The paper introduces a notion of complementarity (substitutability) of two signals which requires that in all decision problems each signal becomes more (less) valuable when the other signal becomes available. We provide a general characterization which relates com- plementarity and substitutability to a Blackwell comparison of two auxiliary signals. In a setting with a binary state space and binary signals, we find an explicit characteriza- tion that permits an intuitive interpretation of complementarity and substitutability. We demonstrate how these conditions extend to more general settings.
|Date of creation:||Aug 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Susan Athey & Jonathan Levin, 1998.
"The Value of Information In Monotone Decision Problems,"
98-24, Massachusetts Institute of Technology (MIT), Department of Economics.
- Jonathan Levin & Susan Athey, 2001. "The Value of Information in Monotone Decision Problems," Working Papers 01003, Stanford University, Department of Economics.
- Miklos Sarvary & Philip M. Parker, 1997. "Marketing Information: A Competitive Analysis," Marketing Science, INFORMS, vol. 16(1), pages 24-38.
- Péter Kondor, 2005.
"The more we know, the less we agree: public announcements and higher-order expectations,"
FMG Discussion Papers
dp532, Financial Markets Group.
- Peter Kondor, 2004. "The more we know, the less we agree: public announcements and higher-order expectations," LSE Research Online Documents on Economics 24645, London School of Economics and Political Science, LSE Library.
- Timothy Feddersen & Wolfgang Pesendorfer, 1997.
"Voting Behavior and Information Aggregation in Elections With Private Information,"
Levine's Working Paper Archive
1560, David K. Levine.
- Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections with Private Information," Econometrica, Econometric Society, vol. 65(5), pages 1029-1058, September.
- Timothy Feddersen & Wolfgang Pesendorfer, 1994. "Voting Behavior and Information Aggregation in Elections with Private Information," Discussion Papers 1117, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Nicola Persico, 2000.
"Information Acquisition in Auctions,"
Econometric Society, vol. 68(1), pages 135-148, January.
- Paul Milgrom & Robert J. Weber, 1981.
"The Value of Information in a Sealed-Bid Auction,"
462, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Schmitz, Patrick W. & Tröger, Thomas, 2011.
"The (sub-)optimality of the majority rule,"
32716, University Library of Munich, Germany.
- Dow, James & Gorton, Gary, 1993. "Trading, Communication and the Response of Asset Prices to News," Economic Journal, Royal Economic Society, vol. 103(418), pages 639-46, May.
- James Andreoni & Tymofiy Mylovanov, 2012. "Diverging Opinions," American Economic Journal: Microeconomics, American Economic Association, vol. 4(1), pages 209-32, February.
- Nicola Persico, 2004. "Committee Design with Endogenous Information," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 165-191.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:29124. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.