the signaling game

A signaling game is a strategic interaction where one party (the sender) communicates information to another (the receiver) through signals or actions. The sender chooses a signal to convey some aspect of their state or quality, aiming to influence the receiver’s decision or belief. The receiver then interprets the signal to make their own choice. The game explores how communication can be truthful or deceptive, and how signals evolve to effectively convey information, balancing costs and benefits for both parties. It’s a key concept in understanding negotiations, job markets, and how information asymmetry is managed in various settings.