For what values of ? and y will signaling occur

Assignment Help Microeconomics
Reference no: EM13328061

There are two types of workers, "quicks" and "slows." Productivity equals 2 for quicks, and 1 for slows. λ (between zero and one) equals the fraction of workers who are slows in the population. Workers may invest in a signal of their ability (a credential of some kind) before applying for jobs, at cost ½•y for quicks, and cost y for slows. All firms pay workers their productivity (if there is signaling), or their expected productivity (if there is no signaling). Workers are employed for only a single period after being hired.

For what values of λ and y will signaling occur (a separating equilibrium)? For what values of λ and y will signaling not occur (a pooling equilibrium)? Briefly explain.

Hint: remember the concept of Nash Equilibrium from your economics classes and employ it here. For signaling to work, each quick and slow must have no incentive to change their behavior individually, given that others are not changing their behavior.

Reference no: EM13328061

Questions Cloud

Graph represents a natural monopoly : Graph represents a natural monopoly.
What is the resistance of the light bulb : A light bulb is wired in series with a 122-? resistor, and they are connected across a 120.0-V source. What is the resistance of the light bulb
Explain a weak acid ha was titrated with koh : A weak acid HA (pKa = 5.00) was titrated with 1.00 M KOH. The acid solution had a volume of 100.0 mL and a molarity of 0.100 M. Find the pH at the following volumes of base added and make a graph of pH versus Vb:
Find dol consider fixed cost assuming additional investment : Consider the following Preliminary cash-flow forecasts for Otobai's electric scooter project (figures are in $billions). Calculate the variable cost per unit at which the electric scooter project would break even.
For what values of ? and y will signaling occur : For what values of λ and y will signaling occur (a separating equilibrium)? For what values of λ and y will signaling not occur (a pooling equilibrium)? Briefly explain.
Estimate the band gap energy for the material : A current of 1mA is passed through a slab of semiconductor material of thickness 1mm with a magnetic field of 0.1 T applied in the perpendicular direction. Estimate the band gap energy for the material
Explain the upper atmosphere by neutron cosmic rays : Tritium (symbol T) is produced in the upper atmosphere by neutron cosmic rays primarily through the 14N(n,T)12C and 16O(n,T)14N reactions.
Compute the current flows in the second wire : A vertical straight wire carrying a 9.0 A current exerts an attractive force per unit length of 7.0X10^-4 N/m on a second parallel wire 8.0 cm away
Explain result of the bromination of trans-stilbene : Explain, mechanistically, why the observed result of the bromination of trans-stilbene is anti addition of bromine, as opposed to syn addition

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd