Signaling Games: Communication When Words Are Cheap
Signaling Games: Communication When Words Are Cheap Why do peacocks have such ridiculously large tails? Why does a college degree help you get a job, even if you learned nothing useful? Why do companies spend millions on Super Bowl ads that don’t describe their products? Signaling theory provides the answer: When words are cheap, credible communication requires costly signals. From biology to business, from education to dating, signaling games explain how information is transmitted when one party knows more than another — and has an incentive to lie. ...