Harmful signaling in matching markets

Alexey Kushnir (alexey.kushnir@gmail.com)

No 509, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: Some labor markets have recently developed formal signaling mechanisms, e.g. the signaling for interviews in the job market for new Ph.D. economists. We evaluate the effect of such mechanisms on two-sided matching markets by considering a game of incomplete information between firms and workers. Workers have almost aligned preferences over firms: each worker has 'typical' commonly known preferences with probability close to one and 'atypical' idiosyncratic preferences with the complementary probability close to zero. Firms have commonly known preferences over workers. We show that the introduction of a signaling mechanism is harmful for this environment. Though signals transmit previously unavailable information, they also facilitate information asymmetry that leads to coordination failures. As a result, the introduction of a signaling mechanism lessens the expected number of matches when signals are informative.

Keywords: Signaling; cheaptalk; matching (search for similar items in EconPapers)
JEL-codes: C72 C78 D80 J44 (search for similar items in EconPapers)
Date: 2010-09
New Economics Papers: this item is included in nep-cta, nep-gth and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://www.zora.uzh.ch/id/eprint/51768/1/iewwp509.pdf (application/pdf)

Related works:
Journal Article: Harmful signaling in matching markets (2013)
Working Paper: Harmful Signaling in Matching Markets (2010)
Working Paper: Harmful Signaling in Matching Markets (2010)
Working Paper: Matching Markets with Signals (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:509

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