23 Asymmetric information: silence,
signaling and suffering education
· We may know different things about the
lit f itquality of an item.
· The signal we give may tell the other how we
· A good signal needs to be differentially costly
across typesacross types.
· Cournot games competing in quantities
· Each firm as marginal costsg
· cost = costMid +| e
· Each player knows his own costs. Opponent can reveal his
· Suppose you know both costs, but your opponent does not.
· Suppose it costs no money to reveal costs. Should you do
O l l if l IfI h l I h· Only reveal costs if lower. IfI have low costs, I want the