Alós-Ferrer, Carlos; Prat, Julien - Institute for the Study of Labor (IZA) - 2008
This paper extends the job market signaling model of Spence (1973) by allowing firms to learn the ability of their employees over time. Contrary to the model without employer learning, we find that the Intuitive Criterion does not always select a unique separating equilibrium. When the Intuitive...