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Register a new userDesigning a Competitive Monotone Signaling Equilibrium
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A decision maker (DM) determines a set of reactions that receivers can choose before senders and receivers move in a generalized competitive signaling model with two-sided matching. The DMs optimal design of the unique stronger monotone signaling equilibrium (unique D1 equilibrium) is equivalent to the choice problem of two threshold sender types, one for market entry and the other for pooling on the top. Our analysis sheds light on the impacts of a trade-off between matching efficiency and signaling costs, the relative heterogeneity of receiver types to sender types, and the productivity of the senders action on optimal equilibrium designing.
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McKelvey and Palfrey (1995)s monotone structural Quantal Response Equilibrium theory may be misspecified for the study of monotone behavior.
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