Reversals of signal-posterior monotonicity imply a bias of screening

• Tác giả: Sander Heinsalu
• Ngôn ngữ: eng
• Ký hiệu phân loại: 003.83 Discrete-time systems
• Thông tin xuất bản: 2019
• Bộ sưu tập: Báo, Tạp chí
• ID: 163444

Tóm tắt

This note strengthens the main result of Lagziel and Lehrer (2019) (LL) "A bias in screening" using Chambers Healy (2011) (CH) "Reversals of signal-posterior monotonicity for any bounded prior". LL show that the conditional expectation of an unobserved variable of interest, given that a noisy signal of it exceeds a cutoff, may decrease in the cutoff. CH prove that the distribution of a variable conditional on a lower signal may first order stochastically dominate the distribution conditional on a higher signal. The nonmonotonicity result is also extended to the empirically relevant exponential and Pareto distributions, and to a wide range of signals.