Equilibrium Information Disclosure: Grade Inflation and Unraveling

39 Pages Posted: 23 Jan 2003

Date Written: January 2003

Abstract

This paper explores information disclosure in matching markets, e.g. the informativeness of transcripts given out by universities. We show that the same amount of information is disclosed in all equilibria. We then demonstrate that if universities disclose the equilibrium amount of information, students and employers will not find it profitable to contract early; if they disclose more, unraveling will occur.

Suggested Citation

Ostrovsky, Michael and Schwarz, Michael A., Equilibrium Information Disclosure: Grade Inflation and Unraveling (January 2003). Harvard Institute of Economic Research Working Paper No. 1996. Available at SSRN: https://ssrn.com/abstract=373122 or http://dx.doi.org/10.2139/ssrn.373122

Michael Ostrovsky

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305
United States
650-724-7280 (Phone)

HOME PAGE: http://faculty-gsb.stanford.edu/ostrovsky/

Michael A. Schwarz (Contact Author)

Microsoft ( email )

2140 Shattuck Ave
Berkeley, CA 94704
United States

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