Abstract

http://ssrn.com/abstract=1769003
 
 

Citations (2)



 


 



Noisy Signaling in Monopoly


Leonard J. Mirman


University of Virginia - Department of Economics

Egas M. Salgueiro


Universidade de Aveiro, S.A.G.E.I.

Marc Santugini


HEC Montreal, Institute of Applied Economics; Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE)

May 29, 2013


Abstract:     
We study the informational role of prices in a stochastic environment. We provide a closed-form solution of the monopoly problem when the price imperfectly signals quality to the uninformed buyers. We then study the effect of noise on output, market price, information flows, and expected profits. The presence of noise may reduce the informational externality due to asymmetric information, which increases the firm's expected profits.

Number of Pages in PDF File: 18

Keywords: Asymmetric information, Learning, Monopoly, Noise, Quality, Rational Expectations, Signaling

JEL Classification: D21, D42, D82, D83, D84, L12, L15

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Date posted: February 25, 2011 ; Last revised: May 29, 2013

Suggested Citation

Mirman, Leonard J. and Salgueiro, Egas M. and Santugini, Marc, Noisy Signaling in Monopoly (May 29, 2013). Available at SSRN: http://ssrn.com/abstract=1769003 or http://dx.doi.org/10.2139/ssrn.1769003

Contact Information

Leonard J. Mirman
University of Virginia (UVA) - Department of Economics ( email )
P.O. Box 400182
114 Rouss Hall
Charlottesville, VA 22904-4182
United States
434-924-6756 (Phone)
434-982-2904 (Fax)
Egas Manuel Da Silva Salgueiro
Universidade de Aveiro, S.A.G.E.I. ( email )
3810-Aveiro
Portugal
Marc Santugini (Contact Author)
HEC Montreal, Institute of Applied Economics ( email )
3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada
Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE) ( email )
Pavillon De Sève
Ste-Foy, Quebec G1K 7P4
Canada
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