Prejudice and Competitive Signaling
In a signaling game between a receiver and senders, prejudice occurs if senders are prejudged based on an index such as race without reference to their qualifying signals. This paper investigates what makes the receiver ignore senders' informative signals in favor of the uninformative index. Prejudice arises when competition between senders erodes their signaling incentive and reduces the quality of signaling significantly. To minimize the decrease in quality, the receiver may prescreen the senders using the index, removing the impact of competition. We advocate policies that enhance the quality of signals to ensure the effectiveness of competitive signaling systems.
|Date of creation:||Nov 2013|
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