Coarse Information Leads to Less Effective Signaling
SCOPUS
KCI
- Title
- Coarse Information Leads to Less Effective Signaling
- Authors
- HAHN, GUANGSUG; Kwon, JY
- Date Issued
- 2018-09
- Publisher
- Korean Economic Society
- Abstract
- This study considers firms’ coarse information about a worker’s possible types in Spence’s (1973) job market signaling model. Using incentive compatibility constraints appropriate to coarse information, we derive perfect Bayesian equilibria, which are refined into a unique equilibrium by invoking an extension of Cho and Kreps’ (1987) Intuitive Criterion. In the unique refined equilibrium, a high-type worker may acquire a higher education level with a lower wage than in Spence’s (1973) model. This implies that education signaling may be less effective signal when firms have coarse information about a worker’s possible types compared to that in Spence (1973). © 2018, Korean Econometric Society. All rights reserved.
- URI
- https://oasis.postech.ac.kr/handle/2014.oak/94955
- DOI
- 10.22812/jetem.2018.29.3.003
- ISSN
- 1229-2893
- Article Type
- Article
- Citation
- Journal of Economic Theory and Econometrics, vol. 29, no. 3, page. 58 - 73, 2018-09
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