Börgers, Tilman and Hernando-Veciana, Angel and Krähmer, Daniel (2010): When are Signals Complements or Substitutes?
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The paper introduces a notion of complementarity (substitutability) of two signals which requires that in all decision problems each signal becomes more (less) valuable when the other signal becomes available. We provide a general characterization which relates com- plementarity and substitutability to a Blackwell comparison of two auxiliary signals. In a setting with a binary state space and binary signals, we find an explicit characteriza- tion that permits an intuitive interpretation of complementarity and substitutability. We demonstrate how these conditions extend to more general settings.
|Item Type:||MPRA Paper|
|Original Title:||When are Signals Complements or Substitutes?|
|Keywords:||Information, signals, complementarity, substitutability.|
|Subjects:||D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General|
|Depositing User:||Tilman Börgers|
|Date Deposited:||25. Feb 2011 16:43|
|Last Modified:||18. Feb 2013 20:10|
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