a signaling game in game theoryA worker who knows her true productivity is applying for a job in a sector of the economy consisting of many identical firms. She could have two possible productivity levels 10 and 20. None of the firms know the worker’s type and believe that both worker types are equally likely. The worker begins the interaction with the labor market by undertaking one of two possible tasks (she records herself doing them and sends the video). The easy task is opening a can of Coke; the hard task is opening two cans of Coke with one hand at the same time as joggling seven balls in the air with the other hand. The utility cost for both types of the easiest task is 0. However the utility cost of the harder task is 1 for the high-productivity type and 6 for the low-productivity type. After observing which task is chosen by the worker all firms set an hourly wage w ∈ [10 20]. Assume also that all firms announce the same wage –the market wage– and that the firm that is talking to the worker believes that if it offers the market wage the worker will stay with that firm. Not hiring the worker is also an option for the firms and there are competitive pressures so that equilibrium profits are zero. The worker’s payoff is wage received minus cost of task while the firm’s payoff is productivity minus wage paid if the worker stays with it (zero otherwise).