Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/262044 
Year of Publication: 
2021
Series/Report no.: 
Staff Report No. 994
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
We study dynamic signaling when the informed party does not observe the signals generated by her actions. A forward-looking sender signals her type continuously over time to a myopic receiver who privately monitors her behavior; in turn, the receiver transmits his private inferences back through an imperfect public signal of his actions. Preferences are linear-quadratic and the information structure is Gaussian. We construct linear Markov equilibria using belief states up to the sender's second-order belief. Because of the private monitoring, this state is an explicit function of the sender's past play, leading to a novel separation effect through the second-order belief channel. Applications to models of organizations and reputation are examined.
Subjects: 
signaling
private monitoring
continuous time
JEL: 
C73
D82
D83
Document Type: 
Working Paper

Files in This Item:
File
Size
1.01 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.