Job Market Signaling

The term "market signaling" is not exactly a part of the welldefined, technical vocabulary of the economist. As a part of the preamble, therefore, I feel I owe the reader a word of explanation about the title. I find it difficult, however, to give a coherent and comprehensive explanation of the meaning of the term abstracted from the contents of the essay. In fact, it is part of my purpose to outline a model in which signaling is implicitly defined and to explain why one can, and perhaps should, be interested in it. One might accurately characterize my problem as a signaling one, and that of the reader, who is faced with an investment decision under uncertainty, as that of interpreting signals.

How the reader interprets my report of the content of this essay will depend upon his expectation concerning my stay in the market. If one believes I will be in the essay market repeatedly, then both the reader and I will contemplate the possibility that I might invest in my future ability to communicate by accurately reporting the content of this essay now. On the other hand, if I am to be in the market only once, or relatively infrequently, then the above-mentioned possibility deserves a low probability. This essay is about markets in which signaling takes place and in which the primary signalers are relatively numerous and in the market sufficiently infrequently that they are not expected to (and therefore do not) invest in acquiring signaling reputations.