Abstract
If product quality of individual units cannot be observed at the time of purchase, but buyers do eventually learn average quality, goods will be traded at a price which reflects buyers’ beliefs about this average. The price will then adjust until buyers’ beliefs about average quality are confirmed ex post.
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© 1989 Palgrave Macmillan, a division of Macmillan Publishers Limited
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Riley, J.G. (1989). Signalling. In: Eatwell, J., Milgate, M., Newman, P. (eds) Allocation, Information and Markets. The New Palgrave. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-20215-7_29
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DOI: https://doi.org/10.1007/978-1-349-20215-7_29
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