Browsing by Author "Schmitz Condeza, Lucas Sebastián"

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    Job market signaling, information acquisition, and competition
    (2022) Schmitz Condeza, Lucas Sebastián; Figueroa González, Nicolás Andrés; Heumann, Tibor; Pontificia Universidad Católica de Chile. Instituto de Economía
    A worker, privately informed about his different and general skills sends a costly signal. Two firms, after observing the signal, decide to invest in information acquisition and then bid in a second-price auction. We assume that firms acquire information about different skills. In equilibrium, firms bid as if they had acquired two pieces of information despite that they acquire only one. Information differentiation allows firms to sidestep the Bertrand paradox and have positive utilities. We also discuss why information differentiation makes sense from the firms’ point of view. We discuss extensions where we test the robustness of our results.