This paper develops a multi-period model, in which workers are matched with jobs according to imperfect educational signals and in which their subsequent productivities depend on both their inherent ability and on the quality of the job match. It outlines a sequential process, in which underpaid...

In this paper we challenge basic results of signaling models. In our banking model each project of a borrower is described by a continuous density of outcomes. Different density functions are classified according to second stochastisch dominance. Combining these features we find that in a...

An individual's contribution to a public good may be seen by others as a signal of attributes such as generosity or wealth. An individual may, therefore, choose their contribution so as to send an appropriate signal to others. In this paper we question how the inferences made by others will...

We study international trade of innovative goods subject to scientific uncertainty on consumers' health effects. Trade of these goods is often at the centre of international disputes. We show that a new trade protectionism may arise because of the scientific uncertainty. A free riding effect is...

We analyze the labor market for painters in Baroque Rome using unique panel data on primary sales of still lifes, portraits, genre paintings, landscapes and figurative paintings. In line with the traditional artistic hierarchy of genres, average price differentials between them were high. We...

We present an experimental analysis of the signaling and screening models of litigation. In both models, bargaining failure is driven by asymmetric information. The difference between the models lies in the bargaining structure: In the signaling game, the informed party makes the final offer,...

This paper analyses the optimal combination of costly and costless messages that a Sender uses in a signaling game if he is able to choose among all equilibrium communication strategies. We provide a complete characterization of the equilibrium that maximizes the Sender's ex ante expected...

We contrast a standard deterministic signaling game with a variant where the signal-generating mechanism is subject to stochastic perturbations. In the theoretical part, we obtain a unique equilibrium with stochastic signals. This equilibrium is separating and has intuitive comparative-static...

The dynamics of incentive contracts under asymmetric information have long been an important topic in economics. We address this topic in this paper by considering a stochastic, two-period principal-agent relationship, in which the true state of the world can take on two possible values and is...

We study a single-period two-stage service-constrained supply chain with an information update. The buyer has two procurement opportunities with the second one after observing a market signal, which updates the demand forecast. He also commits to a service level after observing the market...