Signaling versus costly information acquisition

Arbeitspapier

In Spence's (1973) signaling by education model and in many of its extensions, firms can only infer workers' productivities from their education choices. In reality, firms also use sophisticated pre-employment auditing to learn workers' productivities. We characterize the trade-offs between signaling by workers and costly information acquisition by firms. Information acquisition 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 analysis applies also to other signaling problems, e.g. the financial structure of firms, warranties, and initial public offerings.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Discussion Paper ; No. 2018/11

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Asymmetric and Private Information; Mechanism Design ; Economics of Contract: Theory
• Thema: Signaling ; Information Acquisition ; Auditing

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bester, Helmut ; Lang, Matthias ; Li, Jianpei
• Ereignis: Veröffentlichung
• (wer): Freie Universität Berlin, School of Business & Economics
• (wo): Berlin
• (wann): 2018

Weitere Informationen

• Handle: http://hdl.handle.net/10419/180888
• URN: urn:nbn:de:kobv:188-refubium-22546-7
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ