Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/56915 
Authors: 
Year of Publication: 
2010
Series/Report no.: 
Jena Economic Research Papers No. 2010,084
Publisher: 
Friedrich Schiller University Jena and Max Planck Institute of Economics, Jena
Abstract: 
Candidates compete to persuade a decision maker. The decision maker wishes to select a candidate who possesses a certain ability. Then, as a signaling, each candidate decides whether to perform a task whose performance statistically reflects the ability. However, since the cost of the performance is the same across all candidates, the performance is a poor signaling device. This paper analyzes a 'signaling game with performance' in which the standard single crossing condition is violated. It is shown that more competition makes the equilibrium signaling more informative when the level of competition is moderate. Moreover, the equilibrium signaling can perfectly reveal the ability under a certain level of competition. On the other hand, too much competition always makes the equilibrium signaling less informative.
Subjects: 
signalling
competition
JEL: 
D82
D83
Document Type: 
Working Paper

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