Explain briefly the logic underlying the following statements. 3.1. In Spence's signaling model, there is an innity of N ash equilibria even though it may be viewed as a game in which the uninformed agent moves rst. 3.2. 'What is the Revelation Principle? Give an example of application of this principle in which one can get people to reveal their private information. 3.3. It is said that building reputation talces a long time but you can lose it quickly. Explain this in the context of reputation models (for example, Kreps and \"Wilson 1982). 3.4. Bikhchandani, Hirshleifer and W'elch (1992) provide a theory of informational cascades. 'What assumptions in the paper are needed for cascades in which rational people ignore their information and join an informational cascade? 3.5. In a quote-driven market: A. The bid-ask spread will be larger, the higher is the probability that the specialist will encounter an informed trader. B. The bid-ask spread will converge over time to the \"true value\" of the stock if no new information (other than that conveyed by trading) about this true value arrives through time. 3.6. In Crawford and Sobel (I982) cheap-talk game, what friction prevents information from being perfectly communicated? Mention two solutions to increase the amount of information that is communicated. 3.7. Why do bidders bid lower than their true valuation In a rst-price auction with private value and bid their true valuation in a second-price auction? Which form of auction is better for the seller