Jungbauer, Thomas and Waldman,Michael
Self-reported signaling - American Economic Journal: Microeconomics - 15(3), Aug, 2023: p.78-117
In many real-world settings, an action that affects the value of a product or service is self-reported rather than publicly observable. We investigate self-reporting when self-reports serve as a signal of sender productivity. In our model, a sender chooses an action and then sends a message concerning the action to multiple receivers. Receivers then bid for the sender's service after deciding whether to audit the sender. We find that self-reporting can reverse the standard result in signaling models that there is overinvestment in the action and that the possibility of misrepresentation may in fact improve welfare given self-reported signaling.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/mic.20210204
Self-reported signaling - American Economic Journal: Microeconomics - 15(3), Aug, 2023: p.78-117
In many real-world settings, an action that affects the value of a product or service is self-reported rather than publicly observable. We investigate self-reporting when self-reports serve as a signal of sender productivity. In our model, a sender chooses an action and then sends a message concerning the action to multiple receivers. Receivers then bid for the sender's service after deciding whether to audit the sender. We find that self-reporting can reverse the standard result in signaling models that there is overinvestment in the action and that the possibility of misrepresentation may in fact improve welfare given self-reported signaling.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/mic.20210204