Learning to Signal in Markets

Georg Nöldeke () and Larry Samuelson

Game Theory and Information from EconWPA

Abstract: We formulate a dynamic learning-and-adjustment model of a market in which sellers choose signals that potentitally reveal their types. If the dynamic process selects a unique limiting outcome, then that outcome must be an undefeated equilibrium; though to be undefeated does not suffice to be the sole limiting outcome. If a Riley outcome exists that provides "high" type sellers with a higher utility than any other equilibrim outcome, then that outcome is the unique limiting outcome of our model. In the absence of a Riley outcome,. or if high type workers obtain higher utility in a pooling equlibrium than in the Riley outcome, a unique limit outcome will only emerge under very stringent conditions. If these conditions fail, the market will cycle between various equlibria and, possibly, nonequilibrrium outcomes.

JEL-codes: C7 D8 (search for similar items in EconPapers)
Date: 1994-10-20, Revised 1994-10-21
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Related works:
Working Paper: Learning to signal in markets (1994)
Working Paper: Learning to Signal in Market (1994)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpga:9410001

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