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Dynamic Noisy Signaling

Heinsalu, Sander


This article studies costly signalling. The signalling effort is chosen in multiple periods and observed with noise. The signaller benefits from the belief of the market, not directly from the effort or the signal. Optimal signalling behavior in time-varying environments trades off effort-smoothing and influencing belief exactly when it yields a return. If the return to signalling first increases over time and then decreases, then the optimal effort rises slowly, reaches its maximum before the...[Show more]

CollectionsANU Research Publications
Date published: 2018-05
Type: Journal article
Source: American Economic Journal: Microeconomics
DOI: 10.1257/mic.20160336
Access Rights: Open Access


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