Here are a few quick signaling items for your perusal. I will try to do a similar roundup each Friday if I’ve stumbled on enough items throughout the week. Enjoy!
- How to Signal That You Are Marrying for Love? It’s tougher than you might think. Some suggest using a pre-nuptial agreement to signal one’s love and affection instead of their love of money. If one is truly marrying for love and not money they should have no problem signing a pre-nup if they are the less-wealthy of the pair. However, the pre-nup may act as a signal from the wealthier of the two parties that they have reason to believe that the marriage will not last. Therefore, pre-nups are likely only an optimal signal when they are suggested at first by the least wealthy member of the couple. (via Cheap Talk)
- Tyler Cowen asks the questions “Which ingredient most signals a quality dish?”: I can’t think of one off the top of my head. Scallions is noted in the post, and that’s a pretty good one. I’d think that ingredients that are financially costly and/or time consuming to prepare would also signal quality. So, higher quality cuts of meat or dishes that are slow roasted or smoked, etc. A friend of mine once remarked, “Ah, Bean salad. If you’ve got bean salad then you know there is going to be great desert.” He was using the quality of an earlier dish to predict the quality of a later one. (via Marginal Revolution)
- Can Cheap Talk Deter (PDF)? Potentially in an entry-deterrence situation, according to a draft paper by Dustin Tingley and Barbara Walter. Tingley and Walter find that in an experimental setting, contra the expectations of their formal model, when participants were able to make a verbal threat to the first potential market entrant it decreased the instances of conflict from 83% (where communication wasn’t allowed) to 38%. This is interesting, since the verbal threats by the defender where by definition costless (since they wouldn’t not face the challenger again and additional challengers would not know if they followed through on the threat)–meaning, they shouldn’t have revealed any additional information to the challenger. My first thought is that in an experimental setting subjects might be revealing information through their body language or micro-expressions (which can’t be captured by a formal model) and that these signals conveyed additional information to the challenger. But defenders where only allowed to communicate their threats to challengers through email. The authors offer some potential reasons for the discrepant results, such as the unexpected success of early round costless threats actually signals that the defender is a savvy player and understands the game (i.e. fighting early in early rounds to deter future entrants makes sense, and therefore they are likely to follow through on the threat since future entrants will see that they fought).