When are signals complements or substitutes?

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dc.contributor.author Börgers, Tilman
dc.contributor.author Hernando-Veciana, Ángel
dc.contributor.author Krähmer, Daniel
dc.contributor.editor Universidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned 2007-04-02T09:33:18Z
dc.date.available 2007-04-02T09:33:18Z
dc.date.issued 2007-03
dc.identifier.issn 2340-5031
dc.identifier.uri http://hdl.handle.net/10016/679
dc.description.abstract 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 complementarity and substitutability to a Blackwell-comparison of two auxiliary signals. In a special setting with a binary state space and binary, symmetric signals, we find an explicit characterization that permits an intuitive interpretation of complementarity and substitutability. We demonstrate how these conditions extend to the general case. Finally, we study implications of complementarity and substitutability for information acquisition and in a second price auction.
dc.format.extent 348181 bytes
dc.format.mimetype application/pdf
dc.language.iso eng
dc.language.iso eng
dc.relation.ispartofseries UC3M Working papers. Economics
dc.relation.ispartofseries 07-15
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.other Complementarity
dc.subject.other Substitutability
dc.subject.other Value of information
dc.subject.other Blackwell-ordering
dc.subject.other Statistical decision problem
dc.subject.other Information acquisition
dc.subject.other Second price auction
dc.title When are signals complements or substitutes?
dc.type workingPaper
dc.subject.eciencia Economía
dc.rights.accessRights openAccess
dc.identifier.repec we072111
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