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but here I have to. Here there was asymmetric information in the model.
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And, in this equilibrium, one important party to the equilibrium,
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namely the guys who are going to employ you,
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that's pretty important right?
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All they really have to do in this model, of any importance,
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is form an inference based on your actions.
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They observe whether you get an education or not
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and they conclude whether or not you're a good or bad worker.
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So we're going to write down as a condition of this being an equilibrium
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that those inferences "make sense."
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By make sense I mean that they're consistent with
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what actually is happening in equilibrium.