Does a Non-verifiable Imperfect Informative Binary Signal Always a Strictly Positive Value?

Nien-Pen Liu () and Dachrahn Wu ()
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Nien-Pen Liu: Department of Economics, Aletheia University, Tamsui, Taipei, Taiwan, R.O.C.
Dachrahn Wu: Department of Economics, National Central University, Taiwan, R.O.C.

Economics Bulletin, 2007, vol. 10, issue 7, 1-7

Abstract: Owing to the difference between the status quo utility levels of a good agent and a bad agent, we find that a firm adopting a non-verifiable imperfect informative binary signal does not necessarily change its action (on trading off output efficiency against rent extraction). Hence, the signal does not always a strictly positive value for the firm.

Keywords: Ex; Ante; Non-verifiable; Informative; Signals; Type-Dependent; Status; Quo; Rent; Extraction-Efficiency; Trade-Off. (search for similar items in EconPapers)
JEL-codes: J3 (search for similar items in EconPapers)
Date: 2007-06-21
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