All Questions
Tagged with asymmetric-information game-theory
22 questions
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Market signaling with a national exam
Question:
Consider an economy with a competitive labour market in which firms pay a wage equal to the expected productivity of the employee. There are two types of employees: Good (with a productivity ...
- 25
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0
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21
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Papers on signalling + validation?
Looking to see if there's any game theory literature in which 2+ players play a game of incomplete information. One set of (informed) players gives Spence-like signals to the uninformed player(s). The ...
1
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1
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96
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Definition of information structure in an incomplete information game
I try to understand the model in this paper, pages 48-49. (Bergemann, D., & Morris, S. (2019). Information design: A unified perspective. Journal of Economic Literature, 57(1), 44–95. https://doi....
- 113
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57
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In a standard labor market signaling game, which weak Perfect-Bayesian equilibria (PBE) are actually sequential equilibria?
In a standard labor market signaling game with two types, the only "sensible" equilibria are the least-cost separating equilibria; as such these are the equilibria that survive a standard ...
- 141
1
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1
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210
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Understanding How to Counter the Winner's Curse
In both popular level books on economics/rationality/etc., and videos of actual economics lectures, I keep running into the suggestion to bid in a common value auction as though victory is already ...
- 455
1
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1
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296
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The intuitive criterion
I have asked a similiar question before, but I would very much appreciate if someone would say if my reasoning in this particular case is correct.
Consider the down below:
For part a) I have found ...
- 169
1
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1
answer
548
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How to understand the intuitive criterion
I am studying for my exam in MicroEconomics 2 which involves game theory and I have trouble with understanding the intuitive criterion and how to use it. Consider the down below signalling game.
...
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1
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1
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591
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Exchange Houses game - Bayesian Game
Can anyone help me understand how to solve this type of asymmetric information Bayesian game?
So the game is a different version of the Tadelis 'trading house games'. It involves 2 players
that each ...
- 11
2
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0
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177
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Some questions about Kyle's model in Continuous Auctions and Insider Trading (1985)
I was trying to understand Kyle'e Theorem 1 in page $1319$ in Continuous Auctions and Insider Trading
in 1985. As we can see by the proof, this factor $\beta=\frac{1}{2\lambda}$ refers to the ...
- 498
2
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1
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516
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Pooling equilibrium in akerlof's lemon market with certification cost
Consider a market for 300 used cars where 1/3 of all cars are good quality cars and the rest are bad quality cars. All these cars are owned by (potential) sellers to begin with and each seller owns ...
2
votes
1
answer
86
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Signalling Game, Multiple Signals
I am solving a three-stage game in a supply chain with one buyer and one supplier. The supplier has private information on its production capacity. The supplier also has the option to sell to the ...
- 33
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1
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108
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Some basic questions on infromation asymmetry
How does asymmetric information and bid-ask spread are connected? For instance, economic theory tells us that, the more the problem of information asymmetry, the higher the spread is. What is the ...
- 498
1
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2
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752
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What is the implicaiton of agent risk neutrality in moral hazard?
I heard that risk-neutrality of agent in moral hazard imply that the action associated with first-best and the one associated with second-best will be the same. Is it true and why is it so?
Are there ...
- 392
2
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1
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167
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What does "steep incentive contract" mean in the context of adverse selection?
This term was mentioned in a slide and when I looked online, the only thing which I could find talking about this is this paper.
For example,in the cost-plus-incentive contract
$$x(T, c) = a(T) - a'...
- 392
1
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0
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65
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Is Bayes correlated equilibrium relevant for dynamic games?
Consider the following classification of solution concepts
...
- 265
2
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0
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40
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How far must one reason up the belief hierarchy?
In games of imperfect information, one must reason about the belief on the state of nature, the beliefs of other player's beliefs of their beliefs, and so on. This is referred to as the belief ...
- 265
6
votes
1
answer
924
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Definition of Bayesian Nash equilibrium
I have a basic doubt on the definition of Bayesian Nash equilibrium.
Consider the following game:
1) $N$ players.
2) Each player $i$ has a type, assigned by nature and denoted by $\epsilon_i$.
...
- 378
1
vote
2
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103
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Literature request: Any articles on the signalling theory / game theory / asymmetric information of the firms' recruiting process?
I'd like to read more about the recruiting process of firms. Signalling theory and game theory can be a useful tool to better understand this phenomena.
For example:
Applicants, who ask for higher ...
- 1,044
4
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1
answer
803
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Equilibria in Signaling and Screening
I am now studying the Spence's job market model using both signaling and screening.
It turns out that, when a worker's reservation value = 0 (she can get 0 if she does not get employed), then both ...
- 63
2
votes
1
answer
363
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difference between screening game and moral hazard game
What is the difference between screening game and moral hazard game?
I know that in screening game, TYPE is not known by the principal, while in moral hazard game, EFFORT is not observed by the ...
- 151
2
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0
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405
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Which economic game theory model is most similar to poker?
Propeties the model should have:
Well motivated: the game is actually is a plausible model of a real world situation. Maybe with some parameters learnt from data.
Complete: it is a complete game ...
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5
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1
answer
577
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Moral Hazard or Adverse Selection?
I pay the doctor before he conducts the surgery.
Can anyone explain to me whether this statement shows moral hazard or adverse selection?
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