Self-Reported Signaling
American Economic Journal: Microeconomics
vol. 15,
no. 3, August 2023
(pp. 78-117)
Abstract
In many real-world settings, an action that affects the value of a product or service is self-reported rather than publicly observable. We investigate self-reporting when self-reports serve as a signal of sender productivity. In our model, a sender chooses an action and then sends a message concerning the action to multiple receivers. Receivers then bid for the sender's service after deciding whether to audit the sender. We find that self-reporting can reverse the standard result in signaling models that there is overinvestment in the action and that the possibility of misrepresentation may in fact improve welfare given self-reported signaling.Citation
Jungbauer, Thomas, and Michael Waldman. 2023. "Self-Reported Signaling." American Economic Journal: Microeconomics, 15 (3): 78-117. DOI: 10.1257/mic.20210204Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- I23 Higher Education; Research Institutions
- I26 Returns to Education
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
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