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The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan

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ISSN
1935-1704
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Education Signaling with Uncertain Returns

Tali Regev
Published Online: 2012-08-07 | DOI: https://doi.org/10.1515/1935-1704.1867

Abstract

This paper develops and explores signaling in the market for education based on imperfectly observed heterogeneity in the returns to education rather than heterogeneity in costs. Workers of heterogeneous abilities face the same costs of education, yet the productivity gain from education is higher for more able workers, and employers' observations of productivity are noisy. The paper presents the necessary and sufficient condition replacing the single crossing property in this context, proves that no separating equilibrium exists, and analyzes the mixed strategy equilibrium to produce some new results due to the presence of strategic complementarities.

Keywords: signaling; returns to education

About the article

Published Online: 2012-08-07


Citation Information: The B.E. Journal of Theoretical Economics, Volume 12, Issue 1, ISSN (Online) 1935-1704, DOI: https://doi.org/10.1515/1935-1704.1867.

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©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston. Copyright Clearance Center

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