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Multidimensional Signaling with a Resource Constraint

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  • Seungjin Han
  • Alex Sam

Abstract

We study multidimensional signaling (cognitive/non-cognitive) as a sender's portfolio choice with a resource constraint. We establish the existence of a unique monotone D1 equilibrium where the cognitive (non-cognitive) signal increases (decreases) in sender type and the sum of the two increases in sender type. The equilibrium is characterized by two threshold sender types. The low threshold is one where a kink occurs in signaling. The constraint is binding only for sender types above it. The high threshold is the other one, above which all types spend all the resources in cognitive signal with pooling and discontinuity on the top.

Suggested Citation

  • Seungjin Han & Alex Sam, 2024. "Multidimensional Signaling with a Resource Constraint," Papers 2402.14003, arXiv.org, revised Mar 2024.
    • Handle: RePEc:arx:papers:2402.14003
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    References listed on IDEAS

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    1. Ramey, Garey, 1996. "D1 Signaling Equilibria with Multiple Signals and a Continuum of Types," Journal of Economic Theory, Elsevier, vol. 69(2), pages 508-531, May.
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    1. Kear, Sarah & Marangon Lima, Luana M. & Kittner, Noah, 2025. "Charging forward: A greenhouse gas emissions analysis of New York State's electric vehicle and clean energy goals," Energy Policy, Elsevier, vol. 201(C).

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