Two-Sided Learning and the Ratchet Principle

@article{Cisternas2018TwoSidedLA,
  title={Two-Sided Learning and the Ratchet Principle},
  author={Gonzalo Cisternas},
  journal={The Review of Economic Studies},
  year={2018},
  volume={85},
  pages={307-351}
}
I study a class of continuous-time games of learning and imperfect monitoring. A long-run player and a market share a common prior about the initial value of a Gaussian hidden state, and learn about its subsequent values by observing a noisy public signal. The long-run player can nevertheless control the evolution of this signal, and thus affect the market’s belief. The public signal has an additive structure, and noise is Brownian. I derive conditions for an ordinary differential equation to… 

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