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Nien-Pen Liu and Dachrahn Wu
''Does a Non-verifiable Imperfect Informative Binary Signal Always a Strictly Positive Value?''
( 2007, Vol. 10 No.7 )
Owing to the difference between the status quo utility levels of a good agent and a bad agent, we find that a firm adopting a non-verifiable imperfect informative binary signal does not necessarily change its action (on trading off output efficiency against rent extraction). Hence, the signal does not always a strictly positive value for the firm.
Keywords: Ex Ante Non-verifiable Informative Signals Type-Dependent Status Quo Rent Extraction-Efficiency Trade-Off.
JEL: J3 - Wages, Compensation, and Labor Costs: General
Manuscript Received : Jun 21 2007 Manuscript Accepted : Jun 21 2007

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