If a Pooling Equilibrium Is Played in a Signaling Game

question 23

True/False

If a pooling equilibrium is played in a signaling game, beliefs about the sender type can take on any form along the branch of the game tree that is not played in equilibrium, but on the branch that is played, beliefs are identical to the probability distribution with which "nature" assigned types to the sender.

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Definitions:

Competitive Market

An economic scenario where numerous producers and consumers interact, ensuring prices are determined by supply and demand forces without significant influence by any single participant.

Sunk Costs

Expenses that have been incurred and cannot be recovered, regardless of future actions.

Competitive Market

A market structure where many buyers and sellers exchange homogeneous products and no single participant has the power to significantly influence the price of the product.

Economic Profits

The difference between the total revenue earned by a business and the total costs (both explicit and implicit) of all inputs used, representing the additional gain over and above the opportunity costs.