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Signaling through tests
The Quarterly Review of Economics and Finance ( IF 4.324 ) Pub Date : 2023-08-25 , DOI: 10.1016/j.qref.2023.08.001
Nicolás Figueroa , Carla Guadalupi

A firm (sender), privately informed about product quality, chooses a public test. Tests vary in informativeness and return a binary result. The market (receiver) forms interim beliefs based on test informativeness and posteriors based on test results. We show that standard single-crossing does not hold everywhere. A more informative test is less costly to the high type, who fails it less often, while better interim beliefs may benefit either the high or the low type depending on the prior. When a firm’s expected quality is low, an increase in interim beliefs makes the market more sensitive to test results. Then the high type has more incentives to choose a more informative test and separation occurs. When a firm’s expected quality is high, a further increase in interim beliefs makes the market less sensitive to test results. In this case, the unique equilibrium is pooling with both types choosing a test with intermediate level of informativeness.



中文翻译:

通过测试发出信号

一家公司(发送者)私下了解产品质量,选择公开测试。测试的信息量各不相同,并返回二进制结果。市场(接收者)根据测试信息形成临时信念,并根据测试结果形成后验。我们证明标准单交叉并不适用于所有地方。对于高类型的人来说,信息更丰富的测试成本更低,失败的频率也更低,而更好的临时信念可能对高类型或低类型有利,具体取决于先前的情况。当公司的预期质量较低时,临时信念的增加会使市场对测试结果更加敏感。然后,高类型就有更多的动机选择信息更丰富的测试,从而发生分离。当公司的预期质量较高时,临时信念的进一步增加会使市场对测试结果的敏感度降低。在这种情况下,

更新日期:2023-08-25
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