Signaling by Bayesian Persuasion and Price Strategy
Speaker: Prof. Jun Zhang (University of Technology Sydney)
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Topic: |
Signaling by Bayesian Persuasion and Price Strategy |
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Time&Date: |
15:00-16:15 pm, 2019/4/26 (Friday) |
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Venue: |
Room 619, Teaching A |
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Speaker: |
Prof. Jun Zhang (University of Technology Sydney) |
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| Abstract: | This paper investigates how a privately informed seller could signal her type through Bayesian persuasion and pricing strategy. We find that it is generally impossible to signal the seller’s type through one channel alone. Furthermore, the outcome that survives the intuitive criterion always exists and is unique. This equilibrium outcome is separating, for which a closed-form solution is provided. The signaling concern forces the high-type seller to disclose inefficiently more information and charge a higher price, resulting in fewer sales and lower profit. Finally, we show that a regulation on minimal quality could potentially hurt social welfare, and private information hurts the seller. |
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