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The Complete Idiot's Guide to Game Theory by Edward Rosenthal, Ph.D., Edward C. Rosenthal

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Status Symbols as Strategies

There are numerous other “games” people play where sending signals is an integral part of the action. The sorts of “games” I’m thinking of are hard to capture with crisp and clean game theory models but they are nevertheless full of strategic interaction and deserve mention.

Expensive Signals

Do you wear designer clothing or accessories? If so, why did you purchase them? I doubt that your choice was made because designer merchandise is better made or more durable. We engage in such “branding” behavior all the time: we attend certain universities (and wear their sweatshirts proudly); we buy certain make cars; we spend three times the necessary amount of money to have a logo on a shirt; and so on.
Clearly, branding ...

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