Decision Sciences
4 years ago

Sellers' Signals Reshape Markets, Upending Equilibrium Dynamics

Game Theory and Information
Learning to Signal in Markets
Georg Nöldeke, Larry Samuelson

Paper Summary

The article discusses how sellers in a market choose signals to show their quality. If a unique outcome is reached, it is a strong equilibrium. A Riley outcome can be the best for high-quality sellers. Without a Riley outcome, the market may cycle between different equilibria.

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