Economics of Compliments
نویسنده
چکیده
This paper uses an analytical model to examine the economics of compliments. Salespersons give compliments to clients. Academics give compliments to other individuals in the field. Employees in a company give compliments to peers and superiors. The central question of this research is who will invest more in a compliment and how does this investment depend on the receiver. In a model of full information, we examine how the complimenting behavior is affected by sender ability, by receiver ability, and the interaction between the two. The model sheds insight into the equilibrium outcome when the presence of a compliment can serve as a signal of unobserved sender ability.
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