Works
- Job Market Signaling, Quarterly Journal of Economics, 1973
In Tactics of Organizational Politics
Ideas
Signaling. When employers cannot observe a candidate's productivity, candidates can communicate it through a costly action, such as education, provided the action is less costly for more productive people. The signal can separate types even if it adds nothing to productivity itself.
What it explains
Spence explains why visible, costly acts are believed when words are not: long hours, a painful public stand, or a resignation tell observers something because faking them is expensive. It also explains why people inside organizations invest in signals that are noticed in place of results that are not.
Tactics that draw on A. Michael Spence (31)
- Austerity Optics
- Bad Apple Transfer
- Best Athlete Hiring
- Busyness Badge
- Competence Signaling
- Constant Loyalty Signaling
- Costly Signal of Commitment
- Early Adopter Overpayment
- Early Adopter Trap
- External Reputation Shield
- Funding the First Step Yourself
- Future Expert Gambit
- Impact Inflation
- Innovation Launch Alongside Cuts
- Leadership Vacation Test
- Liability Transfer
- Loyalty Litmus Test
- Malicious Compliance
- Manufactured Crisis Stress Test
- Nixon Goes to China
- Process over Outcome
- Resignation as Verdict
- Resource Shortfall Case
- Sponsorship Vacuum
- Succession Plan as Threat
- Theater of Busyness
- Training as Patronage
- Turnaround Signal Hire
- Unbudgeted Volunteer Army
- Untouchable Loyalist
- Weaponized Incompetence
In Thinking Tools
Known for
A Nobel laureate economist known for signaling theory: when employers cannot observe productivity, candidates can reveal it through a costly action, such as education, that is cheaper for more productive people, so the signal separates types even if it adds nothing to productivity.