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Job market signaling and screening: An experimental comparison

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Author Info
Dorothea Kuebler, Wieland Mueller and Hans Normann () (Department of Economics, Royal Holloway, University of London)

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

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information

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  1. Lisa Posey & Abdullah Yavas, 2007. "Screening equilibria in experimental markets," The Geneva Papers on Risk and Insurance Theory, Springer, vol. 32(2), pages 147-167, December. [Downloadable!] (restricted)
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