Equation 22 · When Generation Becomes Free, Attention Becomes the Scarce Good
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Spence’s contribution was to explain how information can cross the asymmetry without direct verification. An agent takes a costly action — in his original case, education — and the action separates types only under a specific condition: the marginal cost of the signal must be lower for the type the signal is supposed to identify. In the standard notation, with signal level s and type increasing in ability, the single-crossing condition is
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