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The quality of child care: A signaling game with incomplete information

Robert Fenge and Matthias Wrede ()

Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: This paper analyzes the e ects of asymmetric information between parents and child care centers about the quality of child care. In a dynamic game of incomplete information the child care center sends a signal about its child care quality. The parents cannot observe the true quality. By updating the information the parents decide whether they enforce high quality. We consider policy measures to increase the ex-post probability of high quality. Some measures turn out to have negative e ects on ex-post quality. Furthermore, we determine the welfare in the perfect Bayesian equilibria and the welfare-maximizing e ort to increase the probability of high quality.

JEL-codes: J13 C73 D19 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2015
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112870

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