Market Signaling of Personal Characteristics

University of Chicago Law School, John M. Olin Law & Economics Working Paper No. 87

46 Pages Posted: 15 Nov 1999

See all articles by Gertrud M. Fremling

Gertrud M. Fremling

Ph.D. in Economics, University of California at Lo

Richard A. Posner

University of Chicago Law School; National Bureau of Economic Research (NBER)

Date Written: November 1999

Abstract

The literature on signaling emphasizes signaling by business firms and also signaling by individuals by means of gifts or consumption. But it has rarely considered signaling by individuals by means of market behavior such as buying and selling. This paper seeks to fill this gap in the literature. It presents a model of such signaling, emphasizing the distinction between endowed and purchased status signaling; explains behaviors too readily dismissed as "irrational"; and reinterprets the results of a number of experiments in behavioral economics as artifacts of signaling rather than symptoms of cognitive deficiencies or moral concerns.

Suggested Citation

Fremling, Gertrud M. and Posner, Richard A., Market Signaling of Personal Characteristics (November 1999). University of Chicago Law School, John M. Olin Law & Economics Working Paper No. 87, Available at SSRN: https://ssrn.com/abstract=193490 or http://dx.doi.org/10.2139/ssrn.193490

Gertrud M. Fremling

Ph.D. in Economics, University of California at Lo ( email )

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Richard A. Posner (Contact Author)

University of Chicago Law School ( email )

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