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2 votes

Definition of information structure in an incomplete information game

In the usual formulation of games of incomplete information and in mechanism design, types represent both everything that enters a player's payoff function that is not an action and the information ...
Michael Greinecker's user avatar
2 votes

Market signaling with a national exam

I think your reasoning is correct. There is no need to have an ''expected pay'' as in a separating equilibrium, everyone ''knows'' that good types will take the test and bad types will not. The only ...
tdm's user avatar
  • 12.4k
1 vote

Information asymmetry and market failure

It’s little bit more nuanced. Market failure in economics is rigorously defined as a situation where markets are not allocatively efficient (see Ledyard 2017). That is, technically speaking, market ...
1muflon1's user avatar
  • 56.9k

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