IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Job Market Signaling and Screening: An Experimental Comparison

  • Kübler, Dorothea


    (WZB - Social Science Research Center Berlin)

  • Müller, Wieland


    (University of Vienna)

  • Normann, Hans-Theo


    (Goethe University Frankfurt)

We analyze the Spence education game in experimental markets. We compare a signaling and a screening variant, and we analyze the effect of increasing the number of competing employers from two to three. In all treatments, more efficient workers invest more often in education and employers offer higher wages for workers who have invested. However, separation is incomplete, e.g., investment does not pay on average for efficient worker types. Increased competition leads to higher wages in the signaling sessions, not with screening. In the signaling version, we observe significantly more separating outcomes than in the screening version of the game.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1794.

in new window

Length: 42 pages
Date of creation: Oct 2005
Date of revision:
Publication status: published in: Games and Economic Behavior, 2008, 64 (1), 219-236
Handle: RePEc:iza:izadps:dp1794
Contact details of provider: Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page:

Order Information: Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Kübler, D. & Müller, W., 2002. "Simultaneous and sequential price competition on heterogeneous duopoly markets : Experimental evidence," Other publications TiSEM f2d9029e-d44e-48af-8187-f, Tilburg University, School of Economics and Management.
  2. Cho, In-Koo & Sobel, Joel, 1990. "Strategic stability and uniqueness in signaling games," Journal of Economic Theory, Elsevier, vol. 50(2), pages 381-413, April.
  3. Riley, John G, 1979. "Testing the Educational Screening Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S227-52, October.
  4. G. Bolton, 2010. "A comparative model of bargaining: theory and evidence," Levine's Working Paper Archive 263, David K. Levine.
  5. Ernst Fehr & Armin Falk, 2003. "Wage Rigidity in a Competitive Incomplete Contract Market," Labor and Demography 0305001, EconWPA.
  6. Cooper, David J. & Kagel, John H., 2003. "The impact of meaningful context on strategic play in signaling games," Journal of Economic Behavior & Organization, Elsevier, vol. 50(3), pages 311-337, March.
  7. repec:oup:qjecon:v:87:y:1973:i:3:p:355-74 is not listed on IDEAS
  8. Randolph Sloof & Hessel Oosterbeek & Joep Sonnemans, 2007. "Does Making Specific Investments Unobservable Boost Investment Incentives?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(4), pages 911-942, December.
  9. Banks, Jeffrey S & Sobel, Joel, 1987. "Equilibrium Selection in Signaling Games," Econometrica, Econometric Society, vol. 55(3), pages 647-61, May.
  10. David Cooper & John Kagel, 2008. "Learning and transfer in signaling games," Economic Theory, Springer, vol. 34(3), pages 415-439, March.
  11. Brandts, Jordi & Holt, Charles A, 1993. "Adjustment Patterns and Equilibrium Selection in Experimental Signaling Games," International Journal of Game Theory, Springer, vol. 22(3), pages 279-302.
  12. Brandts, Jordi & Holt, Charles A, 1992. "An Experimental Test of Equilibrium Dominance in Signaling Games," American Economic Review, American Economic Association, vol. 82(5), pages 1350-65, December.
  13. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  14. 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.
  15. Dufwenberg, Martin & Gneezy, Uri, 1998. "Price Competition and Market Concentration: An Experimental Study," Working Paper Series 1998:8, Uppsala University, Department of Economics.
  16. Dorothea Kuebler, Wieland Mueller and Hans Normann, 2004. "Job market signaling and screening: An experimental comparison," Royal Holloway, University of London: Discussion Papers in Economics 04/02, Department of Economics, Royal Holloway University of London, revised Apr 2004.
  17. Kelly Bedard, . "Human Capital Versus Signaling Models: University Access and High School Drop-outs," Claremont Colleges Working Papers 1999-01, Claremont Colleges.
  18. Cooper, David J., 2008. "Learning in Entry Limit Pricing Games," Handbook of Experimental Economics Results, Elsevier.
  19. Riley, John G, 1979. "Informational Equilibrium," Econometrica, Econometric Society, vol. 47(2), pages 331-59, March.
  20. repec:oup:qjecon:v:117:y:2002:i:3:p:817-869 is not listed on IDEAS
  21. Cooper, David J & Garvin, Susan & Kagel, John H, 1997. "Adaptive Learning vs. Equilibrium Refinements in an Entry Limit Pricing Game," Economic Journal, Royal Economic Society, vol. 107(442), pages 553-75, May.
  22. Miller, Ross M. & Plott, Charles R., . "Product Quality Signaling in Experimental Markets," Working Papers 447, California Institute of Technology, Division of the Humanities and Social Sciences.
  23. Martin, Stephen & Normann, Hans-Theo & Snyder, Christopher M, 2001. "Vertical Foreclosure in Experimental Markets," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 466-96, Autumn.
  24. Cadsby, Charles Bram & Frank, Murray & Maksimovic, Vojislav, 1998. "Equilibrium Dominance in Experimental Financial Markets," Review of Financial Studies, Society for Financial Studies, vol. 11(1), pages 189-232.
  25. David J. Cooper & Susan Garvin & John H. Kagel, 1997. "Signalling and Adaptive Learning in an Entry Limit Pricing Game," RAND Journal of Economics, The RAND Corporation, vol. 28(4), pages 662-683, Winter.
  26. Charness, Gary & Rabin, Matthew, 2001. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series qt4qz9k8vg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  27. Potters, Jan & van Winden, Frans, 1996. "Comparative Statics of a Signaling Game: An Experimental Study," International Journal of Game Theory, Springer, vol. 25(3), pages 329-53.
  28. Mailath George J. & Okuno-Fujiwara Masahiro & Postlewaite Andrew, 1993. "Belief-Based Refinements in Signalling Games," Journal of Economic Theory, Elsevier, vol. 60(2), pages 241-276, August.
  29. Paul Milgrom & John Roberts, 1998. "Limit Pricing and Entry Under Incomplete Information: An Equilibrium Analysis," Levine's Working Paper Archive 245, David K. Levine.
  30. Cadsby, Charles B & Frank, Murray & Maksimovic, Vojislav, 1990. "Pooling, Separating, and Semiseparating Equilibria in Financial Markets: Some Experimental Evidence," Review of Financial Studies, Society for Financial Studies, vol. 3(3), pages 315-42.
  31. Wolpin, Kenneth I, 1977. "Education and Screening," American Economic Review, American Economic Association, vol. 67(5), pages 949-58, December.
  32. repec:oup:qjecon:v:102:y:1987:i:2:p:179-221 is not listed on IDEAS
  33. Holt, Charles A, 1985. "An Experimental Test of the Consistent-Conjectures Hypothesis," American Economic Review, American Economic Association, vol. 75(3), pages 314-25, June.
  34. Layard, Richard & Psacharopoulos, George, 1974. "The Screening Hypothesis and the Returns to Education," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 985-98, Sept./Oct.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp1794. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.