Signaling and Screening: Theory and Evidence
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چکیده
Spence, QJE 1973 “Job Market Signaling” The big point: If there is a heterogeneity of types and there exists a signal which has a cost that is negatively correlated with productivity then there exist an infinite number of equlibirium which produce perfect information. Spence hopes to generate a model that “a considerable variety of market and quasimarket phenomena like admissions procedures, promotion in organizations, loans and consumer credit can be usefully viewed through.” This may generally be useful in cases where the incentive for truthfully revelation is low and thus observable characteristics become the basis of decisions.
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