Luke_A_Somers comments on What Is Signaling, Really? - Less Wrong

74 Post author: Yvain 12 July 2012 05:43PM

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Tags: game_theory signaling

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Comment author: jmmcd 10 July 2012 09:47:37PM 2 points [-]

Nitpick:

The stupid person, on the other hand, thinks: “As a stupid person, if I take the course, I have a 50% chance of passing and making $60,000 extra, and a 50% chance of failing and making $0 extra. My expected benefit is $30,000, but my expected cost is $50,000. I'll stay out of school and take the $40,000 salary for non-graduates.”

...assuming that stupid people all know they're stupid, and that they're all perfectly rational experts at game theory

There's no game theory in that calculation.

Comment author: Luke_A_Somers 13 July 2012 03:54:54PM 1 point [-]

Plus, it pretends college is instantaneous and the benefits of college last one year.

Comment author: Decius 16 July 2012 01:07:20AM 0 points [-]

And it also pretends that there's only one employer and that he makes only one hiring decision, and that failing out of college is just as expensive as graduating.

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