Too Cool for School? Signaling and Countersignaling

Nick J. Feltovich, Rick Harbaugh, Ted To
2001 Social Science Research Network  
In signalling 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
more » ... separate them from low types, but countersignalling itself is a signal of confidence that separates high types from medium types. Experimental results confirm that subjects can learn to countersignal.
doi:10.2139/ssrn.272593 fatcat:hz7cmbpqgzcxfa5vbmj3ltqh3q