Signaling with Two Correlated Characteristics
This paper generalizes the canonical feature of signaling models that signaling costs are negatively correlated with productive capabilities. A worker has two characteristics - signaling cost (low/high) and productive capability (low/high) - each combination of which can be realized with positive probability. The main results identify one key condition to guarantee the existence of a unique (partially) separating equilibrium. This finding has new implications for the role of education or a pre-signaling stage that induces the condition to hold.
|Date of creation:||2016|
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- Kelly Bedard, 2001.
"Human Capital versus Signaling Models: University Access and High School Dropouts,"
Journal of Political Economy,
University of Chicago Press, vol. 109(4), pages 749-775, August.
- Kelly Bedard, "undated". "Human Capital Versus Signaling Models: University Access and High School Drop-outs," Claremont Colleges Working Papers 1999-01, Claremont Colleges.
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- 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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- In-Koo Cho & David M. Kreps, 1987.
"Signaling Games and Stable Equilibria,"
The Quarterly Journal of Economics,
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- Riley, John G, 1979. "Testing the Educational Screening Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 227-252, October.
- Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
- Seung Han Yoo, 2016. "Mechanism Design with Two Types of Information," Discussion Paper Series 1604, Institute of Economic Research, Korea University.
- Kevin Lang & David Kropp, 1986. "Human Capital Versus Sorting: The Effects of Compulsory Attendance Laws," The Quarterly Journal of Economics, Oxford University Press, vol. 101(3), pages 609-624.
- Quinzii, Martine & Rochet, Jean-Charles, 1985. "Multidimensional signalling," Journal of Mathematical Economics, Elsevier, vol. 14(3), pages 261-284, June.
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