Vague Good News and Accurate Bad News: A Modular Approach
Speaker
Amnon Schreiber
Date
20/01/2025 - 12:30 - 11:15Add To Calendar
2025-01-20 11:15:31
2025-01-20 12:30:00
Vague Good News and Accurate Bad News: A Modular Approach
Joint with: lan Kremer (HUJI) and Andy Skrzypacz (Stanford University)
Abstract: We analyze a model where a firm voluntarily discloses verifiable signals about its value. A Bayesian market, unaware of the specific signals the firm holds, sets the firm price based on Bayes’ rule. Our main result indicates that the firm tends to disclose "bad signals" only if they are accurate. Conversely, "good signals" will be disclosed even if they are noisy. We focus on a specific equilibrium refinement, which we call "Modular." This modular equilibrium exhibits many interesting and beneficial features, which we discuss in detail.
Seminar room 011, building 504
אוניברסיטת בר-אילן - Department of Economics
Economics.Dept@mail.biu.ac.il
Asia/Jerusalem
public
Place
Seminar room 011, building 504
Affiliation
BIU
Abstract
Joint with: lan Kremer (HUJI) and Andy Skrzypacz (Stanford University)
Abstract: We analyze a model where a firm voluntarily discloses verifiable signals about its value. A Bayesian market, unaware of the specific signals the firm holds, sets the firm price based on Bayes’ rule. Our main result indicates that the firm tends to disclose "bad signals" only if they are accurate. Conversely, "good signals" will be disclosed even if they are noisy. We focus on a specific equilibrium refinement, which we call "Modular." This modular equilibrium exhibits many interesting and beneficial features, which we discuss in detail.
Last Updated Date : 19/01/2025
