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The quality of child care: A signaling game with incomplete information

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  • Fenge, Robert
  • Wrede, Matthias

Abstract

This paper analyzes the e ects of asymmetric information between parents and child care centers about the quality of child care. In a dynamic game of incomplete information the child care center sends a signal about its child care quality. The parents cannot observe the true quality. By updating the information the parents decide whether they enforce high quality. We consider policy measures to increase the ex-post probability of high quality. Some measures turn out to have negative e ects on ex-post quality. Furthermore, we determine the welfare in the perfect Bayesian equilibria and the welfare-maximizing e ort to increase the probability of high quality.

Suggested Citation

  • Fenge, Robert & Wrede, Matthias, 2015. "The quality of child care: A signaling game with incomplete information," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112870, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:112870
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    References listed on IDEAS

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    1. Naci Mocan, 2007. "Can consumers detect lemons? An empirical analysis of information asymmetry in the market for child care," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 743-780, October.
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    Cited by:

    1. Camehl, Georg F. & Schober, Pia S. & Spiess, C. Katharina, 2018. "Information asymmetries between parents and educators in German childcare institutions," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue Latest Ar, pages 1-23.

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    More about this item

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D19 - Microeconomics - - Household Behavior - - - Other

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