Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/33240 
Year of Publication: 
2005
Series/Report no.: 
IZA Discussion Papers No. 1794
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We analyze the Spence education game in experimental markets. We compare a signaling and a screening variant, and we analyze the effect of increasing the number of competing employers from two to three. In all treatments, more efficient workers invest more often in education and employers offer higher wages for workers who have invested. However, separation is incomplete, e.g., investment does not pay on average for efficient worker types. Increased competition leads to higher wages in the signaling sessions, not with screening. In the signaling version, we observe significantly more separating outcomes than in the screening version of the game.
Subjects: 
Job-market signaling
job-market screening
sorting
Bayesian games experiments
JEL: 
C35
I2
J24
P3
P52
Document Type: 
Working Paper

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