Sorting Via Screening Versus Signaling: A Theoretic and Experimental Comparison
29 Pages Posted: 17 May 2013
Date Written: April 16, 2013
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
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