SFB 303 Discussion Paper No. A - 148

Author: Nöldeke, Georg, and Eric van Damme
Title: Signaling in a Dynamic Labor Market
Abstract: This paper analyses a multiperiod version of the Spence job market signaling model in which workers cannot commit to an education choice and firms make wage offers at any point of time. Contrary to what intuition seems to suggest, we find that plausible equilibria result in almost perfect separation of workers of different ability, provided that the time between offers is sufficiently small and the length of the game is sufficiently long.
Creation-Date: December 1987
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