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 language | English |
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Journal | Economics Bulletin |
Volume | 10 |
Issue number | 7 |
State | Published - 21 Jun 2007 |