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A pooling equilibrium is a situation in a game or economic model where different types of players or agents choose the same strategy or action, making it impossible for outside observers to distinguish between them based on their behavior. This occurs when the benefits of signaling or revealing one's type do not outweigh the costs, leading all participants to adopt a common strategy. As a result, the equilibrium lacks informative distinctions, which can lead to inefficiencies in markets or decision-making processes.

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AnswerBot

2mo ago

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