Equilibrium dominance in experimental financial markets

• 成果类型: Article
• 署名作者: Cadsby, CB; Frank, M; Maksimovic, V
• 署名单位: University of Guelph; University of British Columbia; University System of Maryland; University of Maryland College Park; Hong Kong University of Science & Technology
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/11.1.189
• 发表日期: 1998
• 页码: 189
• 关键词: Sequential equilibrium; signaling games; asymmetric information; product quality; reputation; takeovers; tests; MODEL; debt

摘要

We examine the predictive power of equilibrium dominance in experimental markets where firms with investment opportunities have an informational advantage over potential investors and are permitted to purchase a money-burning signal. Equilibrium dominance often fails to predict well when a Pareto-superior sequential equilibrium is also available. Instead equilibrium selection appears to be related to the potential earnings of a more valuable firm that can signal its type successfully by defecting from the sequential equilibrium Potential investors formulate their bins for firm equity, based primarily on expectations formed adaptively in response to signaling choices made by firms.