Separating Signaling Equilibria Under Random Relations between Costs and Attributes: Discrete Attributes
Posted: 18 Jan 2004
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Separating Signaling Equilibria Under Random Relations between Costs and Attributes: Discrete Attributes
Number of pages: 14
Posted: 18 Jan 2004
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Abstract
We identify conditions for separating signaling equilibria where discrete attributes are randomly related to a continuum of costs. A necessary condition is the ordering of the cost distributions conditional on attributes by first order stochastic dominance. A necessary and sufficient condition is the ordering of the cost distributions conditional on attributes by the monotone likelihood ratio property. An equivalent necessary and sufficient condition is the monotone ordering of the cost elasticities of these distributions.
JEL Classification: D82
Suggested Citation: Suggested Citation
Feldman, David, Separating Signaling Equilibria Under Random Relations between Costs and Attributes: Discrete Attributes. Mathematical Social Sciences, Vol. 48, pp. 93-101, 2004, Available at SSRN: https://ssrn.com/abstract=490201
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