Simultaneous Signaling ∗

In both university and job application and search processes, an applicant to a particular institution may be able to increase the probability of receiving an offer by demonstrating his or her interest in that institution. We characterize the optimal set of institutions to which a candidate should demonstrate interest (i.e., send costly signals) from among the set of institutions to which a market participant has applied. In a simultaneous-decision model, we demonstrate that a greedy algorithm – one which is simple to characterize and easy to understand – implements the optimal decision rule. Our work generalizes Chade and Smith (2006). Following our characterization of the optimal mechanism, we perform a comparative statics exercise that lends insight into the determination of the optimal set of institutions to which a candidate chooses to signal. ∗The authors thank Lones Smith and Larry Snyder for thoughtful comments. All errors are our own. †Corresponding author: Department of Economics, Rauch Business Center, Lehigh University, 621 Taylor Street, Bethlehem, PA 18015. Phone: (610) 758-5129. Fax: (610) 758-4677. E-mail: jad8@lehigh.edu. ‡Amazon.com