Showing off or laying low? The economics of psych-outs

Denter, Philipp; Sisak, Dana; Morgan, John

Showing off or laying low? The economics of psych-outs

Author(s): Denter, Philipp; Sisak, Dana; Morgan, John

Publisher: American Economic Association

Issued date: 2022-02-02

Citation: Denter, P., Morgan, J., & Sisak, D. (2022). Showing Off or Laying Low? The Economics of Psych-outs. American Economic Journal: Microeconomics, 14 (1), pp. 529-580.

ISSN: 1945-7669

DOI: https://doi.org/10.1257/mic.20190234

xmlui.dri2xhtml.METS-1.0.item-contributor-funder: Ministerio de Economía y Competitividad (España)
Agencia Estatal de Investigación (España)

Sponsor: Denter and Sisak gratefully acknowledge the financial support of the Swiss National Science Foundation through grants PBSGP1-135426 (Denter) and PBSGP1-130765 (Sisak). Denter gratefully acknowledges the support from the Ministerio Economia y Competitividad (Spain) through grants ECO2014-55953-P, MDM 2014-0431, and PGC2018-098510-B-I00.

Project: Gobierno de España. ECO2014-55953-P
Gobierno de España. PGC2018-098510-B-I00
Gobierno de España. MDM 2014-0431

Keywords: Showing off , Norms , Selection , Contests

JEL Classification: D82 , D83 , D91 , Z13

URI: http://hdl.handle.net/10016/35278

Rights: © American Economic Association

Abstract:

We analyze the incentives for showing off, which we model as a costly signaling game, and study the consequences of norms against such behavior. Prior to competing in a contest, a newcomer can signal his talent to an incumbent. In equilibrium, costly signaling [+]

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