Börgers, Tilman Hernando-Veciana, Angel Kröhmer, Daniel
Year of Publication:
Discussion Paper, Center for Mathematical Studies in Economics and Management Science 1488
The paper introduces a notion of complementarity (substitutability) of two signals which requires that in all decision problems each signal becomes more (less) valuable when the other signal becomes available. We provide a general characterization which relates complementarity and substitutability to a Blackwell comparison of two auxiliary signals. In a setting with a binary state space and binary signals, we find an explicit characterization that permits an intuitive interpretation of complementarity and substitutability. We demonstrate how these conditions extend to more general settings.
Complementarity substitutability value of information Blackwell ordering