Signaling and Countersignaling: A Theory of Understatement

In signaling environments ranging from consumption to education, high quality senders often shun the standard signals that should separate them from lower quality senders. We find that allowing for additional, noisy information on sender quality permits equilibria where medium types signal to separate themselves from low types, but high types then choose to not signal or countersignal. High types not only save costs by relying on the additional information to stochastically separate them from low types, but countersignaling itself is a signal of confidence which separates high types from medium types. Experimental results confirm that subjects can learn to countersignal.signaling; countersignaling; understatement

Gifts as Economic Signals and Social Symbols

Gift-giving has often puzzled economists, especially because efficient gifts-like cash or giving exactly what a person asks for-seem crass or inappropriate. It is shown in a formal game-theoretic model that gifts serve as "signals" of a person's intentions about future investment in a relationship, and inefficient gifts can be better signals. Other explanations for the inefficiency of gift giving are advanced, and some stylized facts about gift-giving practices are described (many of which are consistent with the signaling view of gifts)

Spartan Daily, October 7, 1994

Volume 103, Issue 26https://scholarworks.sjsu.edu/spartandaily/8596/thumbnail.jp

Public disclosure by ‘small’ traders

We model strategic trading by a rent-seeking insider, who exchanges without being spotted, and propose a comprehensive theory of market non-anonymity. Several novel results are established. They depend on asset value proprieties, beliefs, inter-temporal choices, and investorsí characteristics. In equilibrium, under a regulation mandating public trade revelation, disclosures may shift prices. If they do, uninformed manipulations arise only in some instances. SpeciÖcally, insiders constrained on asset holdings earn more than they would without such a disclosure rule. Consequently, mandating disclosures is unnecessary, as informative trades will be revealed voluntarily. This result reveals a previously unexplored link to the literature on (uncertiÖed/non-factual) announcements

Career sidestep, wage setback? The impact of different types of career breaks on wages.

Research; Impact;

KK-anonymous Signaling Scheme

We incorporate signaling scheme into Ad Auction setting, to achieve better welfare and revenue while protect users' privacy. We propose a new \emph{$K$-anonymous signaling scheme setting}, prove the hardness of the corresponding welfare/revenue maximization problem, and finally propose the algorithms to approximate the optimal revenue or welfare

Use of a controlled experiment and computational models to measure the impact of sequential peer exposures on decision making

It is widely believed that one's peers influence product adoption behaviors. This relationship has been linked to the number of signals a decision-maker receives in a social network. But it is unclear if these same principles hold when the pattern by which it receives these signals vary and when peer influence is directed towards choices which are not optimal. To investigate that, we manipulate social signal exposure in an online controlled experiment using a game with human participants. Each participant in the game makes a decision among choices with differing utilities. We observe the following: (1) even in the presence of monetary risks and previously acquired knowledge of the choices, decision-makers tend to deviate from the obvious optimal decision when their peers make similar decision which we call the influence decision, (2) when the quantity of social signals vary over time, the forwarding probability of the influence decision and therefore being responsive to social influence does not necessarily correlate proportionally to the absolute quantity of signals. To better understand how these rules of peer influence could be used in modeling applications of real world diffusion and in networked environments, we use our behavioral findings to simulate spreading dynamics in real world case studies. We specifically try to see how cumulative influence plays out in the presence of user uncertainty and measure its outcome on rumor diffusion, which we model as an example of sub-optimal choice diffusion. Together, our simulation results indicate that sequential peer effects from the influence decision overcomes individual uncertainty to guide faster rumor diffusion over time. However, when the rate of diffusion is slow in the beginning, user uncertainty can have a substantial role compared to peer influence in deciding the adoption trajectory of a piece of questionable information

On Smiles, Winks, and Handshakes as Coordination Devices

In an experimental study we examine a variant of the 'minimum effort game', a coordination game with Pareto ranked equilibria, and risk considerations pointing to the least efficient equilibrium.We focus on the question whether simple cues such as smiles, winks and handshakes could be recognized and employed by the players as a tell-tale sign of each other's trustworthiness, thus enabling them to coordinate on the more risky but more rewarding Pareto efficient equilibrium.Our experimental results show that such cues may indeed play a role as coordination devices as their information value is significant and substantial.game theory;trust

Costless Discrimination and Unequal Achievements in a Labour Market Experiment

We investigate the emergence of discrimination in an experiment where individuals affiliated to different groups compete for a monetary prize, submitting independent bids to an auctioneer. The auctioneer receives perfect information about the bids (i.e. there is no statistical discrimination), and she has no monetary incentive to favour the members of her own group (the bidders are symmetric). We observe nonetheless some discrimination by auctioneers, who tend to assign the prize more frequently to a member of their own group when two or more players put forward the highest bid. Out-group bidders react to this bias and reduce significantly their bids, causing an average decay of their earnings throughout the game, with cumulative effects that generate strongly unequal outcomes. Because the initial bias is costless, such mechanism can survive even in competitive market, providing a rationale for a well-known puzzle in the literature, i.e. the long-run persistence of discrimination.discrimination, tournament, groups, experiment

On Smiles, Winks, and Handshakes as Coordination Devices

In an experimental study we examine a variant of the 'minimum effort game' , a coordination game with Pareto ranked equilibria, and risk considerations pointing to the least efficient equilibrium. We focus on the question whether simple cues such as smiles, winks and handshakes could be recognized and employed by the players as a tell-tale sign of each other's trustworthiness , thus enabling them to coordinate on the more risky but more rewarding Pareto efficient equilibrium. Our experimental results show that such cues may indeed play a role as coordination devices as their information value is significant and substantial.Coordination games, Pareto efficiency, Trust, Cues, Signals