Signalling (economics)

Signalling in economics is when somebody does something to show that they have a certain quality or skill, even if that's not necessarily true. For example, imagine that you were looking for a job, and you wanted to show a potential employer that you had a lot of skills and experience. You might dress up in a nice suit for the interview, or put bold titles on your resume to make it look like you had more experience than you actually did. That's an example of signalling — showing the employer something that suggests you have a certain quality, even if it's not necessarily true.