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Sorting via Screening versus Signaling: A Theoretic and Experimental Comparison

Author

Listed:
  • Werner Güth

    () (Max Planck Institute of Economics, Strategic Interaction Group)

  • Fabian Winter

    () (Max Planck Institute of Economics, Strategic Interaction Group)

Abstract

Similar to Kübler et al. (2008, GEB 64, p. 219-236), we compare sorting in games with asymmetric incomplete information theoretically and experimentally. Rather than distinguishing two very different sequential games, we use the same game format and capture the structural difference of screening and signaling only via their payoff specification. The experiment thus relies on the same verbal instructions. Although the equilibrium outcomes coincide, greater efficiency losses off the equilibrium play due to sorting under signaling, compared to screening, is predicted and confirmed experimentally.

Suggested Citation

  • Werner Güth & Fabian Winter, 2013. "Sorting via Screening versus Signaling: A Theoretic and Experimental Comparison," Jena Economic Research Papers 2013-017, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2013-017
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    File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_2013_017.pdf
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    References listed on IDEAS

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    Cited by:

    1. Bronsert, Anne-Kathrin & Glazer, Amihai & Konrad, Kai A., 2014. "Old Money, the Nouveau Riche and Brunhilde's Marriage Dilemma," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100385, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    sorting; screening; signaling; wage bargaining; off-equilibrium play;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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