Dynamic Signaling with Dropout Risk

• 成果类型: Article
• 署名作者: Dilme, Francesc; Li, Fei
• 署名单位: University of Bonn; University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20120112
• 发表日期: 2016
• 页码: 57-82
• 关键词: market; equilibria; education; offers; lemons; games

摘要

We study the role of dropout risk in dynamic signaling. A seller privately knows the quality of an indivisible good and decides when to trade. In each period, he may draw a dropout shock that forces him to trade immediately. To avoid costly delay, the seller with a low-quality good voluntarily pools with early dropouts, implying that the expected quality of the good increases over time. We characterize the time-varying equilibrium trading dynamics. It is demonstrated that the maximum equilibrium delay of trade is decreasing in the initial belief that the good is of high quality.