Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/20482
Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Noisy signaling: Theory and experiment
Authors: de, Haan Thomas
Offerman, Theo
Sloof, Randolph
Contact Email: thomas.dehaan@stir.ac.uk
Keywords: Signaling games
Noise
Separation
Experiments
Issue Date: Nov-2011
Publisher: Elsevier
Citation: de Haan T, Offerman T & Sloof R (2011) Noisy signaling: Theory and experiment, Games and Economic Behavior, 73 (2), pp. 402-428.
Abstract: We introduce noise in the signaling technology of an otherwise standard wasteful signaling model (Spence, 1973). We theoretically derive the properties of the equilibria under different levels of noise and we experimentally test how behavior changes with noise. We obtain three main insights. First, if the amount of noise increases, high types aiming for separation (must) increase their signaling expenditures. This theoretical prediction is confirmed in our experiment. Second, for intermediate and high levels of noise, a separating and pooling equilibrium co-exist. In the experiment, subjects tend to shift from coordinating on a separating outcome to a pooling one as noise increases. Third, a surprising theoretical insight is that a separating equilibrium ceases to exist for low levels of noise (and an unfavorable prior). Yet in the experiment subjects then do coordinate on separation. A simple attraction learning model incorporating belief learning, imitation and reinforcement, explains this stable non-equilibrium behavior.
Type: Journal Article
URI: http://hdl.handle.net/1893/20482
URL: http://www.scopus.com/inward/record.url?partnerID=yv4JPVwI&eid=2-s2.0-80053594226&md5=53d6f8c3320c680f0640b08bef01370d
DOI Link: http://dx.doi.org/10.1016/j.geb.2011.04.006
Rights: The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study.
Affiliation: Economics
University of Amsterdam
University of Amsterdam

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