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Job market signaling and screening: An experimental comparison

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Abstract

We analyze the Spence education game in experimental markets. We compare a signaling and a screening variant, and we analyze the e¤ect of increasing the number of employers from two to three. In all treatments, there is a strong tendency to separate. More e¢cient workers invest more often and employers bid higher for workers who have invested. More e¢cient workers also earn higher wages. Employers’ pro…ts are usually not di¤erent from zero. Increased competition leads to higher wages only in the signaling sessions. We …nd that workers in the screening sessions invest more often and earn higher wages when there are two employers.

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Bibliographic Info

Paper provided by Department of Economics, Royal Holloway University of London in its series Royal Holloway, University of London: Discussion Papers in Economics with number 04/02.

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Length: 43 pages
Date of creation: Apr 2004
Date of revision: Apr 2004
Handle: RePEc:hol:holodi:0402

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Keywords: job-market signaling; job-market screening; sorting; Bayesian games; experiments;

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References

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Citations

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Cited by:
  1. Kübler, D. & Müller, W. & Normann, H.T., 2008. "Job-market signalling and screening: An experimental study," Open Access publications from Tilburg University urn:nbn:nl:ui:12-347328, Tilburg University.
  2. Hornig, Stephan O. & Rottmann, Horst & Wapler, Rüdiger, 2011. "Sorting on the labour market: A literature overview and theoretical framework," OTH im Dialog: Weidener Diskussionspapiere 27, University of Applied Sciences Amberg-Weiden (OTH).
  3. Koch, Alexander K. & Morgenstern, Albrecht & Raab, Philippe, 2004. "An Experimental Test of Career Concerns," IZA Discussion Papers 1405, Institute for the Study of Labor (IZA).
  4. Volker Benndorf & Dorothea Kübler & Hans-Theo Normann, 2013. "Privacy Concerns, Voluntary Disclosure of Information, and Unraveling: An Experiment," SFB 649 Discussion Papers SFB649DP2013-040, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  5. Jeitschko, Thomas D. & Normann, Hans-Theo, 2012. "Signaling in deterministic and stochastic settings," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 39-55.
  6. Friedrich Poeschel, 2013. "Assortative matching through signals," 2013 Papers ppo178, Job Market Papers.
  7. Koch, Alexander K. & Morgenstern, Albrecht & Raab, Philippe, 2009. "Career concerns incentives: An experimental test," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 571-588, October.
  8. Lisa L. Posey & Abdullah Yavas, 2007. "Screening equilibria in experimental markets," The Geneva Risk and Insurance Review, Palgrave Macmillan, vol. 32(2), pages 147-167, December.
  9. Kübler, Dorothea & Müller, Wieland & Normann, Hans-Theo, 2005. "Job Market Signaling and Screening: An Experimental Comparison," IZA Discussion Papers 1794, Institute for the Study of Labor (IZA).
  10. Andrei Bremzeny & Elena Khokhlovaz & Anton Suvorov & Jeroen van de Ven, 2011. "Bad News: An Experimental Study on the Informational Effects of Rewards," Working Papers w0164, Center for Economic and Financial Research (CEFIR).

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