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Game Theory & Math Economics: Rann Smorodinsky (Technion) - "Bayesian learning in markets with common value" | Einstein Institute of Mathematics

Game Theory & Math Economics: Rann Smorodinsky (Technion) - "Bayesian learning in markets with common value"

Date: 
Sun, 29/10/201716:00-17:00
Location: 
Elath Hall, 2nd floor, Feldman Building, Edmond J. Safra Campus
Two  firms produce substitute goods with unknown quality. At each stage the firms set prices and a consumer with private information and unit demand buys from one of the fi rms. Both  firms and consumers see the entire history of prices and purchases. Will such markets aggregate information? Will the superior  rm necessarily prevail? We adapt the classical social learning model by introducing strategic dynamic pricing. We provide necessary and sufficient conditions for learning. In contrast to previous results, learning can occur when signals are bounded. This happens when signals exhibit the newly introduced vanishing likelihood property.