Does a non-verifiable imperfect informative binary signal always create a strictly positive value?

Nien Pen Liu, Dachrahn Wu

Research output: Contribution to journalArticlepeer-review

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 create a strictly positive value for the firm.

Original languageEnglish
JournalEconomics Bulletin
Volume10
Issue number7
StatePublished - 21 Jun 2007

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