Equilibrium Information Disclosure: Grade Inflation and Unraveling
39 Pages Posted: 23 Jan 2003
Date Written: January 2003
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.
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