Cursed Job Market Signaling
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arXiv
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| Main Authors: | , |
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| Format: | Preprint |
| Published: |
2025
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| _version_ | 1866916704850804736 |
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| author | Lin, Po-Hsuan Tan, Yen Ling |
| author_facet | Lin, Po-Hsuan Tan, Yen Ling |
| contents | We study how cursedness, the tendency to neglect how other people's strategies depend on their private information, affects information transmission in Spence's job market signaling game. We characterize the Cursed Sequential Equilibrium and show that as players become more cursed, the worker obtains less education -- a costly signal that does not enhance productivity -- suggesting that cursedness improves the efficiency of information transmission. However, this efficiency improvement depends on the richness of the message space. Revisiting the job market signaling experiment by Kübler, Müller, and Normann (2008), we find supportive evidence for our theory. |
| format | Preprint |
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arxiv_https___arxiv_org_abs_2503_19089 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Cursed Job Market Signaling Lin, Po-Hsuan Tan, Yen Ling General Economics Economics We study how cursedness, the tendency to neglect how other people's strategies depend on their private information, affects information transmission in Spence's job market signaling game. We characterize the Cursed Sequential Equilibrium and show that as players become more cursed, the worker obtains less education -- a costly signal that does not enhance productivity -- suggesting that cursedness improves the efficiency of information transmission. However, this efficiency improvement depends on the richness of the message space. Revisiting the job market signaling experiment by Kübler, Müller, and Normann (2008), we find supportive evidence for our theory. |
| title | Cursed Job Market Signaling |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2503.19089 |