Wang, Zonghui2023-03-012023-03-012015Thesis 9598https://unbscholar.lib.unb.ca/handle/1882/14257In this report the relationship between advertising level and quality is studied where advertising level is a random variable drawn from Normal distribution or Beta distribution. Consumers' prior beliefs are updated according to Bayesian rule after observing the level of advertising as a signal. In the previous literature the consumers ' beliefs were considered to be only binary, in contrast we examine the perfect Bayesian Nash equilibrium of a signaling game where consumers' beliefs are continuous. When the marginal cost of a high-quality firm is equal to that of a low-quality firm we derive a pooling equilibrium under both Normal and Beta distributions wherein the low-quality firm has an incentive to mimic the advertising level of the high-quality firm.text/xmlv, 32 pageselectronicen-CAhttp://purl.org/coar/access_right/c_abf2master thesis2020-08-25Dalkir, ElifEconomics