IDEAS home Printed from https://ideas.repec.org/a/spr/reecde/v27y2023i1d10.1007_s10058-021-00279-y.html
   My bibliography  Save this article

A model of competitive signaling with rich message spaces

Author

Listed:
  • Tomás Rodríguez Barraquer

    (The Universidad de los Andes)

  • Xu Tan

    (University of Washington)

Abstract

We examine a signaling game with competition: multiple senders each choose one task to perform, and one receiver observes the senders’ tasks choices and their performance (success or failure) and matches them to a limited number of jobs. Importantly, the space of tasks is rich in the sense that there are arbitrarily close different tasks to any given task. Higher tasks are associated with a stronger screening power but a lower probability of success. Intuitively, choosing a slightly higher task than those chosen by others only slightly reduces the probability of success, while it could significantly (discretely) increase the likelihood of getting a job. This must be so under a trembling-hand refinement because of the richness of the task space: tasks that are very close to each other must give rise to similar beliefs in the receiver. Thus, pooling at the highest task is the only equilibrium outcome in many situations, such as when high tasks have a sufficiently strong screening power or when competition is sufficiently high.

Suggested Citation

  • Tomás Rodríguez Barraquer & Xu Tan, 2023. "A model of competitive signaling with rich message spaces," Review of Economic Design, Springer;Society for Economic Design, vol. 27(1), pages 1-43, February.
    • Handle: RePEc:spr:reecde:v:27:y:2023:i:1:d:10.1007_s10058-021-00279-y
    DOI: 10.1007/s10058-021-00279-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10058-021-00279-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10058-021-00279-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kreps, David M & Wilson, Robert, 1982. "Sequential Equilibria," Econometrica, Econometric Society, vol. 50(4), pages 863-894, July.
    2. Ed Hopkins, 2012. "Job Market Signaling Of Relative Position, Or Becker Married To Spence," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 290-322, April.
    3. Nick Feltovich & Richmond Harbaugh & Ted To, 2002. "Too Cool for School? Signalling and Countersignalling," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 630-649, Winter.
    4. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 179-221.
    5. John G. Riley, 2001. "Silver Signals: Twenty-Five Years of Screening and Signaling," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 432-478, June.
    6. Chia-Hui Chen & Junichiro Ishida & Wing Suen, 2020. "Signaling under Double-Crossing Preferences," ISER Discussion Paper 1103, Institute of Social and Economic Research, Osaka University.
    7. Gill, David & Sgroi, Daniel, 2012. "The optimal choice of pre-launch reviewer," Journal of Economic Theory, Elsevier, vol. 147(3), pages 1247-1260.
    8. Arianna Degan & Ming Li, 2021. "Persuasion with costly precision," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 869-908, October.
    9. Chia-Hui Chen & Junichiro Ishida & Wing Suen, 2021. "Reputation Concerns in Risky Experimentation [Reputation and Survival: Learning in a Dynamic Signalling Model]," Journal of the European Economic Association, European Economic Association, vol. 19(4), pages 1981-2021.
    10. Ying Chen, 2015. "Career Concerns and Excessive Risk Taking," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(1), pages 110-130, March.
    11. Banks, Jeffrey S & Sobel, Joel, 1987. "Equilibrium Selection in Signaling Games," Econometrica, Econometric Society, vol. 55(3), pages 647-661, May.
    12. Daley, Brendan & Green, Brett, 2014. "Market signaling with grades," Journal of Economic Theory, Elsevier, vol. 151(C), pages 114-145.
    13. Chia-Hui Chen & Junichiro Ishida & Wing Suen, 2020. "Signaling under Double-Crossing Preferences," ISER Discussion Paper 1103r, Institute of Social and Economic Research, Osaka University, revised Dec 2020.
    14. Brendan Daley & Erik Snowberg, 2011. "Even if it is not Bribery: The Case for Campaign Finance Reform," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 27(2), pages 324-349.
    15. Alós-Ferrer, Carlos & Prat, Julien, 2012. "Job market signaling and employer learning," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1787-1817.
    16. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Figueroa, Nicolás & Guadalupi, Carla, 2021. "Testing the sender: When signaling is not enough," Journal of Economic Theory, Elsevier, vol. 197(C).
    2. Helmut Bester & Matthias Lang & Jianpei Li, 2021. "Signaling versus Auditing," RAND Journal of Economics, RAND Corporation, vol. 52(4), pages 859-883, December.
    3. Daley, Brendan & Green, Brett, 2014. "Market signaling with grades," Journal of Economic Theory, Elsevier, vol. 151(C), pages 114-145.
    4. Arianna Degan & Ming Li, 2021. "Persuasion with costly precision," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 869-908, October.
    5. Bester, Helmut & Lang, Matthias & Li, Jianpei, 2018. "Signaling versus costly information acquisition," Discussion Papers 2018/11, Free University Berlin, School of Business & Economics.
    6. Mehmet Ekmekci & Nenad Kos, 2020. "Signaling Covertly Acquired Information," Working Papers 658, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    7. Richard Chisik, 2015. "Job market signalling, stereotype threat and counter‐stereotypical behaviour," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(1), pages 155-188, February.
    8. Brendan Daley & Brett Green, 2012. "Waiting for News in the Market for Lemons," Econometrica, Econometric Society, vol. 80(4), pages 1433-1504, July.
    9. Hallman, Alice & Spiro, Daniel, 2023. "A theory of hypocrisy," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 401-410.
    10. Ivan Anic & Vladimir Bozin & Branko Uroševic, 2016. "A Signaling Model of University Selection," CESifo Working Paper Series 5741, CESifo.
    11. Liu, Shuo & Pei, Harry, 2020. "Monotone equilibria in signaling games," European Economic Review, Elsevier, vol. 124(C).
    12. Kremer, Ilan & Skrzypacz, Andrzej, 2007. "Dynamic signaling and market breakdown," Journal of Economic Theory, Elsevier, vol. 133(1), pages 58-82, March.
    13. Alessandro Cigno & Annalisa Luporini, 2019. "Student loans and the allocation of graduate jobs," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(1), pages 339-378, February.
    14. Chris Bidner, 2014. "A spillover-based theory of credentialism," Canadian Journal of Economics, Canadian Economics Association, vol. 47(4), pages 1387-1425, November.
    15. Bilancini, Ennio & Boncinelli, Leonardo, 2018. "Signaling with costly acquisition of signals," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 141-150.
    16. Sharon Belenzon & Aaron K. Chatterji & Brendan Daley, 2020. "Choosing Between Growth and Glory," Management Science, INFORMS, vol. 66(5), pages 2050-2074, May.
    17. Alós-Ferrer, Carlos & Prat, Julien, 2012. "Job market signaling and employer learning," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1787-1817.
    18. Gea M. Lee & Seung Han Yoo, 2013. "Unobserved Investment, Signaling, and Welfare," Discussion Paper Series 1301, Institute of Economic Research, Korea University, revised 2017.
    19. Hedlund, Jonas, 2017. "Bayesian persuasion by a privately informed sender," Journal of Economic Theory, Elsevier, vol. 167(C), pages 229-268.
    20. Sexton, Richard J., 1991. "Game Theory: A Review With Applications To Vertical Control In Agricultural Markets," Working Papers 225865, University of California, Davis, Department of Agricultural and Resource Economics.

    More about this item

    Keywords

    Asymmetric information; Signaling; Competition;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:reecde:v:27:y:2023:i:1:d:10.1007_s10058-021-00279-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.