Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94610
Authors: 
Feltovich, Nick
Harbaugh, Rick
To, Ted
Year of Publication: 
1999
Series/Report no.: 
Claremont Colleges Working Papers in Economics 1999-21
Abstract: 
In signaling environments ranging from consumption to education, high quality senders often shun the standard signals that should separate them from lower quality senders. We find that allowing for additional, noisy information on sender quality permits equilibria where medium types signal to separate themselves from low types, but high types then choose to not signal or countersignal. High types not only save costs by relying on the additional information to stochastically separate them from low types, but countersignaling itself is a signal of confidence which separates high types from medium types. Experimental results confirm that subjects can learn to countersignal.
Subjects: 
signaling
countersignaling
understatement
JEL: 
C72
D82
D83
Document Type: 
Working Paper

Files in This Item:
File
Size
342.9 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.