Information in (Adverse) Selection Games
Applicants of unknown types apply to multiple evaluators, seeking funding from one. Evaluators only want to fund High types, and see costless and private signals of applicants’ (i) types and (ii) rejection histories.
I study how evaluators’ equilibrium payoffs respond to (Blackwell) improvements in either signal. First, I characterise the effect of improving the type signal when the history signal is uninformative. This hinges on whether (i) the improvement is through stronger good news or bad news, (ii) adverse selection is relevant. I describe the decision rules maximising evaluators’ total payoffs, and the effect of improving type signals on payoffs when these are imposed.
Then, I show that a fully informative history signal maximises evaluators’ total payoffs irrespective of the type signal. Nonetheless, some Blackwell improvements of evaluators’ signals might reduce equilibrium payoffs.
Date:
3 February 2023, 12:45 (Friday, 3rd week, Hilary 2023)
Venue:
Manor Road Building, Manor Road OX1 3UQ
Venue Details:
Seminar Room G or https://zoom.us/j/96595245637
Speaker:
Carlos Akkar (University of Oxford)
Organising department:
Department of Economics
Part of:
Student Research Workshop in Micro Theory
Booking required?:
Not required
Audience:
Members of the University only
Editor:
Emma Heritage
