Matching markets with signals

Arbeitspapier

A costless signaling mechanism has been proposed as a device to improve welfare in decentralized two-sided matching markets. An example of such an environment is a job market for new Ph.D. economists. We study a market game of incomplete information between firms and workers and show that costless signaling is actually harmful in some matching markets. Specifically, if agents have very similar preferences, signaling lessens the total number of matches and the welfare of firms, as well as it affects ambiguously the welfare of workers. These results run contrary to previous findings that costless signaling facilitates match formation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 39.2009

Classification and Topics

• Classification: Wirtschaft ; Game Theory and Bargaining Theory: General
• Subject: Matching Markets ; Signaling

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kushnir, Alexey
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/53406
• Last update: 10.03.2025, 11:42 AM CET