Econometrica

Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: May, 1987, Volume 55, Issue 3

Signalling with Many Signals

https://www.jstor.org/stable/1913605
p. 663-674

Maxim Engers

This paper examines a market with asymmetric information where there are many signals available and where both the costs of signalling and 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 signalling and screening models.


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