A pre-condition for employer learning is that signals at labor market entry do not fully reveal graduates’ productivity. I model various distinct sources of signal imperfection—such as noise and multi-dimensional types—and characterize their implications for the private return to skill...

We present a buyer-seller setup in which seller type is private information and buyer utility is state contingent. States of nature are commonly unknown and the seller can design information through a Bayesian experiment on the state by facing a cost based on Shannon’s entropy. Costly...

Signalling social status through visible goods consumption is often perceived as a way in which individuals seek to emulate or move up within the community. This paper assesses the impact of transnational migration on status goods consumption in the Indian state of Kerala. We utilize the...

This paper investigates the informational content of online reviews. For the case of hotels, we model how the length of the stay shapes the variance of review scores. Grounded on violations of temporal monotonicity, errors in recall and hedonic adaptation theories, we first present a...

Signaling mechanisms are prevalent in two-sided markets because they typically help reduce information asymmetry and improve efficiency. While a growing number of studies focus on the actions of signal-senders, there has been little empirical research on how signal-receivers may react to the...

This study examines the relationship between the mandatory disclosure of auditor tenure under AS 3101 and the cost of debt. We find that yield spreads on seasoned bond trades decrease after AS 3101 as auditor tenure increases. Cross-sectional tests suggest that the effect is stronger for...

The discount control mechanisms that closed-end funds often choose to adopt before IPO are supposedly implemented to narrow the difference between share price and net asset value, We find evidence that non-discretionary discount control mechanisms such as mandatory continuation votes serve as...

We use census-like data and a regression discontinuity design to study the labor market impacts of a signal provided by a government-sponsored award given to top-performing students on a nationwide college exit exam in Colombia. Students who can signal their high level of specific skills earn...

We investigate the deterrence effects of a firm-targeted sanction and a politician-targeted sanction deployed by Mainland China against Taiwan to deter support for “Taiwan Independence”. In the short-run, we find that the signal sent by the targeted sanctions generated deterrence to firms...