Silver Signals: Twenty-Five Years of Screening and Signaling

The theory of market signaling and screening is a cornerstone of the new economics of information. The last two and a half decades have not only witnessed a series of remarkable theoretical developments but also a wide range of applications. This essay examines the key theoretical issues and explore...

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Bibliographic Details
Published in:Journal of economic literature 2001-06, Vol.39 (2), p.432-478
Main Author: Riley, John G.
Format: Article
Language:English
Subjects:
Dividends
Economic models
Economic theory
Incumbents
Indifference curves
Marginal costs
Marginal products
Monopoly
Nash equilibrium
Productivity
Studies
Wages
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Summary:The theory of market signaling and screening is a cornerstone of the new economics of information. The last two and a half decades have not only witnessed a series of remarkable theoretical developments but also a wide range of applications. This essay examines the key theoretical issues and explores their use in three major fields: industrial organization, labor, and finance. Considerable emphasis is placed on attempts to test the theory in each of these fields.
ISSN:0022-0515
2328-8175
DOI:10.1257/jel.39.2.432