We identify and explore differential access to population-level signaling (also known as information design) as a source of unequal access to opportunity. A population-level signaler has potentially noisy observations of a binary type for each member of a population and, based on this, produces a signal about each member. A decision-maker infers types from signals and accepts those individuals whose type is high in expectation. We assume the signaler of the disadvantaged population reveals her observations to the decision-maker, whereas the signaler of the advantaged population forms signals strategically. We study the expected utility of the populations as measured by the fraction of accepted members, as well as the false positive rates (FPR) and false negative rates (FNR). We first show the intuitive results that for a fixed environment, the advantaged population has higher expected utility, higher FPR, and lower FNR, than the disadvantaged one (despite having identical population quality), and that more accurate observations improve the expected utility of the advantaged population while harming that of the disadvantaged one. We next explore the introduction of a publicly-observable signal, such as a test score, as a potential intervention. Our main finding is that this natural intervention, intended to reduce the inequality between the populations' utilities, may actually exacerbate it in settings where observations and test scores are noisy.
There is a large literature on individual-level signaling in economics, following on the Nobel-prize-winning work of Spence @cite_26 . The general model there is quite different from our population-level signaling model; in the Spence model, (not populations) invest in (in terms of money or effort) signals whose costs correlate with the individual's type. In that model, equilibria can emerge where high-type individuals are more likely to invest in the signal than low-types, which can result in the signal being useful for admissions or hiring.
@cite_26
2160003140 1787709854 2051166571 1976485684
This paper develops a model of strategic communication, in which a better-informed Sender (S) sends a possibly noisy signal to a Receiver (R), who then takes an action that determines the welfare of both. We characterize the set of Bayesian Nash equilibria under standard assumptions, and show that equilibrium signaling always takes a strikingly simple form, in which S partitions the support of the (scalar) variable that represents his private information and introduces noise into his signal by reporting, in effect, only which element of the partition his observation actually lies in. We show under further assumptions that before S observes his private information, the equilibrium whose partition has the greatest number of elements is Pareto-superior to all other equilibria, and that if agents coordinate on this equilibrium, R's equilibrium expected utility rises when agents' preferences become more similar. Since R bases his choice of action on rational expectations, this establishes a sense in which equilibrium signaling is more informative when agents' preferences are more similar. This paper introduces signaling in a global game so as to examine the informational role of policy in coordination environments such as currency crises and bank runs. While exogenous asymmetric information has been shown to select a unique equilibrium, we show that the endogenous information generated by policy interventions leads to multiple equilibria. The policy maker is thus trapped into a position in which self-fulfilling expectations dictate not only the coordination outcome but also the optimal policy. This result does not rely on the freedom to choose out-of-equilibrium beliefs, nor on the policy being a public signal; it may obtain even if the policy is observed with idiosyncratic noise. A finite-population dynamic evolutionary model is presented, which shows that increasing the individual capacity of sending pre-play signals (without any pre-defined meaning), opens a route for cooperation. The population dynamics leads individuals to discriminate between different signals and react accordingly to the signals received. The proportion of time that the population spends in different states can be calculated analytically. We show that increasing the number of different signals benefits cooperative strategies, illustrating how cooperators may take profit from a diverse signaling portfolio to forecast future behaviors and avoid being cheated by defectors. Abstract The present paper investigates, for the general Andersen model, the asymptotic behaviour of the probability of ruin function when the initial risk reserve tends to infinity. Whereas the exponential (Cramer) case is well understood, in the past, less attention has been paid to a systematic study of a model taking big claim sizes into account. We give a thorough treatment of the latter and also review previously known but mostly scattered results to show how they all follow from essentially one mathematical model.