EconPapers    
Economics at your fingertips  
 

Good News and Bad News: Representation Theorems and Applications

Paul Milgrom ()

Bell Journal of Economics, 1981, vol. 12, issue 2, 380-391

Abstract: This is an article about modeling methods in information economics. A notion of "favorableness" of news is introduced, characterized, and applied to four simple models. In the equilibria of these models, (1) the arrival of good news about a firm's prospects always causes its share price to rise, (2) more favorable evidence about an agent's effort leads the principal to pay a larger bonus, (3) buyers expect that any product information withheld by a salesman is unfavorable to his product, and (4) bidders figure that low bids by their competitors signal a low value for the object being sold.

Date: 1981
References: Add references at CitEc
Citations: View citations in EconPapers (820) Track citations by RSS feed

Downloads: (external link)
http://links.jstor.org/sici?sici=0361-915X%2819812 ... O%3B2-Q&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
Working Paper: Good Nevs and Bad News: Representation Theorems and Applications (1979) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:bellje:v:12:y:1981:i:autumn:p:380-391

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in Bell Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().

 
Page updated 2020-05-29
Handle: RePEc:rje:bellje:v:12:y:1981:i:autumn:p:380-391