Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 29

Consider a signaling model in which the first player may be one of two types. What determines the other player's beliefs about the first player's type before observing the first-player's signal? After observing the first player's signal, what beliefs must the second player have about the first player's type in a separating equilibrium? What beliefs must the second player have in a pooling equilibrium?