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  5. Comparisons of Signals

Comparisons of Signals

  • Benjamin Brooks
  • Alexander Frankel
  • Emir Kamenica
American Economic Review (Forthcoming)

Abstract

Blackwell (1953) studied (equivalent) comparisons of experiments; he characterized when one experiment is more valuable than another regardless of the preferences of the agent. We study (various, non-equivalent) comparisons of signals. Among other comparisons, we characterize when one signal is more valuable than another regardless of the preferences of the agent and regardless of what other information the agent may have. We show this comparison is equivalent to a new condition, termed reveal-or-refine, which says that for every piece of data that could be generated by the more valuable signal, either that data reveals the truth, or it refines the data generated by the less valuable signal.

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