## On-the-job signalling and self-confidenceCenter for Mathematical Studies in Economics and Management Science, Northwestern University, 1999 - 41 pages |

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ability q Bayes rule believes q choose conditions of Theorem confidence 9 constant wage continuation payoff define denote discount discount factor distributed uniformly Econometrica EF[q\ZT efficiency ex-ante fair ex-ante utility ex-post fair exist f(xe f(xg f(xT fair wage firm's fully-separating equilibrium game T7 Game Theory high type hire the worker Ht,wt implies Incentive Compatibility information Zt interim fair labour economics Lemma lt=T Mortensen 1981 Northwestern University On-the-Job Signalling optimal test option outcome overconfident player overconfident workers parameter Perfect Bayesian Equilibrium permanent wage prior private information profit Proof of Proposition Proof of Theorem Pv[f(xe Repeated Games requires reveals her private self-confidence signalling game signalling model solution stop the worker stopping choice strategy takes test test choice test history test path training programs type 9 Ue(x\ZT underconfident worker 9 plays worker with confidence worker's ability workers know