Signalling.

Authors :: Avgeropoulos, Stephanos
Source :: Blackwell Encyclopedic Dictionary of Strategic Management; 2005, p1-305, 304p
Publication Year :: 2005
Abstract: The purpose of signalling is to transfer information from one party to another in a credible way. Early work on signals included Schelling's essay on bargaining, which discussed the matter of promise, observed that "bargaining may have to concern itself with an 'incentive' system as well as the division of gains" (Schelling, 1956, p. 300), and also dealt with bargaining tactics such as "tying one's hands" and offering and accepting hostages. Signalling finds two main applications. The first is in competitive situations, such as where one firm wishes to notify others that it does not welcome them in its market. [ABSTRACT FROM AUTHOR]