• Corpus ID: 85531035

Good signals gone bad: dynamic signalling with switching efforts

  title={Good signals gone bad: dynamic signalling with switching efforts},
  author={Sander Heinsalu},
  journal={arXiv: Economics},
This paper examines signalling when the sender exerts effort and receives benefits over time. Receivers only observe a noisy public signal about the effort, which has no intrinsic value. The modelling of signalling in a dynamic context gives rise to novel equilibrium outcomes. In some equilibria, a sender with a higher cost of effort exerts strictly more effort than his low-cost counterpart. The low-cost type can compensate later for initial low effort, but this is not worthwhile for a high… 

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