My grandmother was a wonderful Scandinavian Lutheran woman who just happened to experience a certain bloodlust when playing bridge. To her, what happened in the game certainly did not stay in the game. The same is true of game theorists. To them, bridge is a clean-ish microcosm in which to study “Bayesian signaling games,” in which partners attempt to communicate through the veil of incomplete information—you know what cards you have, and through your bidding and actions, I attempt to infer what you have.
This game becomes life when you consider a job interview. In it, there are two players: The employer and the applicant. During the interview, the applicant holds the information and tries to signal competence and motivation, while the employer tries to infer the cards the applicant holds: What’s the applicant’s true skill level? There are ways the applicant signals his or her true skill: a university degree, articulate and intelligent conversation, lack of Cheez Whiz on the interview tie, etc.
The first—a university degree—is an interesting signal, and one that implies more than a certain level and type of training. Economically, the primary reasons to earn a degree are expected salary and personal betterment, and the factors standing in the way of the degree are tuition and effort. If required effort is extremely high (i.e., if your mental capacity doesn’t naturally stretch to the course requirements), it may not make economic sense to complete the degree. So in a job interview, having a degree implies that you’re skilled enough to have made the economic choice to earn the degree in the first place.
In this same equation (tuition-plus-effort equals salary-plus-betterment), what do you think is the implication of an applicant who has paid especially high tuition?
