In Spence's (1973) signaling by education model and in many of its extensions, firms can only infer workers …' productivities. We characterize the trade-offs between signaling by workers and costly information acquisition by firms. Information … workers have low productivity. Our analysis applies also to other signaling problems, e.g. the financial structure of firms …

signaling, buyers use it for inspection. Seller induced certification leads to more transparency, because it is informative …

Recent research in contract theory on the effects of behavioral biases implicitly assumes that they are stable, in the …