In a television commercial for a well-known brand of instant cappuccino, a gentleman is entertaining a lady friend at his apartment. He wants to impress her and offers her cappuccino with dessert....


In a television commercial for a well-known brand of instant cappuccino, a gentleman is entertaining a lady friend at his apartment. He wants to impress her and offers her cappuccino with dessert. When she accepts, he goes into the kitchen to make the instant cappuccino—simultaneously tossing take-out boxes into the trash and faking the noises made by a high-class (and expensive) espresso machine. As he is doing so, a voice comes from the other room: “I want to see the machine . . . .” Use your knowledge of games of asymmetric information to comment on the actions of these two people. Pay attention to their attempts to use signaling and screening, and point out specific instances of each strategy. Offer an opinion about which player is the better strategist.




May 26, 2022
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