Artikel
Signaling versus Auditing
We analyze a competitive labor market in which workers signal their productivities through education, and firms have the option of auditing to learn workers' productivities. Audits are costly and non‐contractible. We characterize the trade‐offs between signaling by workers and costly auditing by firms. Auditing is always associated with (partial) pooling of worker types, and education is used as a signal only if relatively few workers have low productivity. Our results feature new auditing patterns and explain empirical observations in labor economics like wage differentials and comparative statics of education choices. Our analysis applies also to other signaling problems, for example, the financial structure of firms, warranties, and initial public offerings.
- Language
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Englisch
- Bibliographic citation
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Journal: The RAND Journal of Economics ; ISSN: 1756-2171 ; Volume: 52 ; Year: 2021 ; Issue: 4 ; Pages: 859-883
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Bester, Helmut
Lang, Matthias
Li, Jianpei
- Event
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Veröffentlichung
- (who)
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Wiley
- (where)
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Hoboken, NJ
- (when)
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2021
- DOI
-
doi:10.1111/1756-2171.12394
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Bester, Helmut
- Lang, Matthias
- Li, Jianpei
- Wiley
Time of origin
- 2021
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