Job market signaling, information acquisition, and competition
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Date
2022
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Abstract
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.
Description
Tesis (Magíster en Economía)--Pontificia Universidad Católica de Chile, 2022