Only Time Will Tell: Credible Dynamic Signaling
Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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Only Time Will Tell : Credible Dynamic Signaling. / Starkov, Egor.
I: Journal of Mathematical Economics, Bind 109, 102894, 12.2023.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Only Time Will Tell
T2 - Credible Dynamic Signaling
AU - Starkov, Egor
PY - 2023/12
Y1 - 2023/12
N2 - This paper characterizes informational outcomes in a model of dynamic signaling with vanishing commitment power. It shows that contrary to popular belief, informative equilibria with payoff-relevant signaling can exist without requiring unreasonable off-path beliefs. The paper provides a sharp characterization of possible separating equilibria: all signaling must take place through attrition, when the weakest type mixes between revealing own type and pooling with the stronger types. The framework explored in the paper is general, imposing only minimal assumptions on payoff monotonicity and single-crossing. Applications to bargaining, monopoly price signaling, and labor market signaling are developed to demonstrate the results in specific contexts.
AB - This paper characterizes informational outcomes in a model of dynamic signaling with vanishing commitment power. It shows that contrary to popular belief, informative equilibria with payoff-relevant signaling can exist without requiring unreasonable off-path beliefs. The paper provides a sharp characterization of possible separating equilibria: all signaling must take place through attrition, when the weakest type mixes between revealing own type and pooling with the stronger types. The framework explored in the paper is general, imposing only minimal assumptions on payoff monotonicity and single-crossing. Applications to bargaining, monopoly price signaling, and labor market signaling are developed to demonstrate the results in specific contexts.
U2 - 10.1016/j.jmateco.2023.102894
DO - 10.1016/j.jmateco.2023.102894
M3 - Journal article
VL - 109
JO - Journal of Mathematical Economics
JF - Journal of Mathematical Economics
SN - 0304-4068
M1 - 102894
ER -
ID: 381794547