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Job market signaling - PowerPoint PPT Presentation

Chapter 14

Chapter 14. Markets with Asymmetric Information. Topics to be Discussed. Quality Uncertainty and the Market for Lemons Market Signaling Moral Hazard The Principal-Agent Problem. Topics to be Discussed. Managerial Incentives in an Integrated Firm

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J ob M arket S ignaling (Spence model)

J ob M arket S ignaling (Spence model). Perfectly competitive firms are bidding for services of workers. Competition bids up the wage rate to the level of the expected productivity of the worker, so firms make 0 profits.

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Job market signaling - PowerPoint PPT Presentation

Chapter 14

J ob M arket S ignaling (Spence model)