Sorting Via Screening Versus Signaling: A Theoretic and Experimental Comparison

29 Pages Posted: 17 May 2013

See all articles by Werner Güth

Werner Güth

Max Planck Institute for Research on Collective Goods; Luiss Guido Carli University

Fabian Winter

Max-Planck-Institute for Research on Collective Goods

Date Written: April 16, 2013

Abstract

Similar to Kübler et al. (2008, GEB 64, p. 219-236), we compare sorting in games with asymmetric incomplete information theoretically and experimentally. Rather than distinguishing two very different sequential games, we use the same game format and capture the structural difference of screening and signaling only via their payoff specification. The experiment thus relies on the same verbal instructions. Although the equilibrium outcomes coincide, greater efficiency of screening, compared to signaling, off the equilibrium play is predicted and confirmed experimentally.

Keywords: sorting, screening, signaling, wage bargaining, off-equilibrium play

JEL Classification: C9, D82, J24, J40

Suggested Citation

Güth, Werner and Winter, Fabian, Sorting Via Screening Versus Signaling: A Theoretic and Experimental Comparison (April 16, 2013). Available at SSRN: https://ssrn.com/abstract=2265795 or http://dx.doi.org/10.2139/ssrn.2265795

Werner Güth

Max Planck Institute for Research on Collective Goods

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Luiss Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

Fabian Winter (Contact Author)

Max-Planck-Institute for Research on Collective Goods ( email )

Kurt Schumacher Str 10
Bonn, 53113
Germany

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