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We study a one-dimensional Hotelling-Downs model of electoral competition with the following innovation: a fraction of candidates have "character" and are exogenously committed to a campaign platform; this is unobservable to voters. Character is desirable, and a voter's utility is a convex combination of standard policy preferences and her assessment of a candidate's character. This structure induces a signaling game between strategic candidates and voters, since a policy platform affects voters' utilities not only directly, but also indirectly through inferences about a candidate's character. The model generates a number of predictions, starting with a failure of the median voter theorem. (JEL D72, D82)

Voices on the political right have long claimed that the welfare state ought to be kept small, and that charities can take over many of the tasks involved in helping those at the bottom of society. The arguments in favor of this claim are controversial, but even if they are accepted at face value the policy proposal remains problematic. For the proposal presupposes that charities would, in fact, be able to raise enough money to provide adequate help to those in need, and therefore assumes that charities are able to very significantly increase the number and/or size of donations they receive. We argue that there are good reasons for doubting that charities will be able to do this. Our argument turns on the fact that the most powerful strategy for eliciting donations—namely, allowing donors to use their donation to signal their pro-sociality—has an inbuilt upper limit. If too much emphasis is placed on the signaling opportunities donating to charity provides, donating no longer functions as an effective signal and the motivation to donate declines.

Purpose
This paper aims to outline different signals that franchisors can use to communicate their value proposition to prospective franchisees. It also tests whether these signals can enable franchisors to charge a premium from their franchisees.


Design/methodology/approach
This paper uses a mixed-methods approach to arrive at the findings. It uses a combination of open-ended survey and archival data to arrive at the findings.


Findings
Franchisees consider franchisor's characteristics such as its "capability," "support offered" and "franchisee membership criteria" significant while buying into their franchises. The results suggest that franchisors can leverage some of their capability signals to obtain a higher franchise fee if they use the right signals as desired by franchisees.


Research limitations/implications
Signals identified in this study are specific to this study. The relationship between the signals and franchise fee is applicable for high-performing franchises operating in the American context only. Future research can address this limitation by collecting more data, testing additional signals and using alternative methods to verify the findings.


Practical implications
Franchisors can take cues from the evaluative criteria used by franchisees to design their signaling strategies. Franchisors can leverage some of their capabilities to extract higher fees from their franchisees. Prospective franchisees should engage in due diligence before purchasing a franchise unit and avoid franchises with higher support fees and loose franchisee recruitment criteria.


Originality/value
This study contributes to research on the evaluative criteria used by franchisees. It contributes to the signaling theory by offering insights into the performance outcomes of signals in the franchising context. It also contributes to our understanding of franchising by adopting a mixed-methods approach that includes information about franchisors and franchisees.

SignificanceMuch of online conversation today consists of signaling ones political identity. Although many signals are obvious to everyone, others are covert, recognizable to ones ingroup while obscured from the outgroup. This type of covert identity signaling is critical for collaborations in a diverse society, but measuring covert signals has been difficult, slowing down theoretical development. We develop a method to detect covert and overt signals in tweets posted before the 2020 US presidential election and use a behavioral experiment to test predictions of a mathematical theory of covert signaling. Our results show that covert political signaling is more common when the perceived audience is politically diverse and open doors to a better understanding of communication in politically polarized societies.

In this paper, citizens vote in order to influence the election outcome and in order to signal their unobserved characteristics to others. The model is one of rational voting and generates the following predictions: (i) The paradox of not voting does not arise, because the benefit of voting does not vanish with population size. (ii) Turnout in elections is positively related to the importance of social interactions. (iii) Voting may exhibit bandwagon effects and small changes in the electoral incentives may generate large changes in turnout due to signaling effects. (iv) Signaling incentives increase the sensitivity of turnout to voting incentives in communities with low opportunity cost of social interaction, while the opposite is true for communities with high cost of social interaction. Therefore, the model predicts less volatile turnout for the latter type of communities. ; Peer-reviewed ; Post-print

In this paper, citizens vote in order to influence the election outcome and in order to signal their unobserved characteristics to others. The model is one of rational voting and generates the following predictions: (i) The paradox of not voting does not arise, because the benefi t of voting does not vanish with population size. (ii) Turnout in elections is positively related to the size of the local community and the importance of social interactions. (iii) Voting may exhibit bandwagon effects and small changes in the electoral incentives may generate large changes in turnout due to signaling effects. (iv) Signaling incentives increase the sensitivity of turnout to voting incentives in communities with low opportunity cost of social interaction, while the opposite is true for communities with high cost of social interaction. Therefore, the model predicts less volatile turnout for the latter type of communities.

In the presence of incomplete information, strong states have an incentive to invest in costly signals that can differentiate them from weaker states. I argue that states can signal strength by handicapping themselves, deliberately reducing their combat effectiveness. In an ultimatum crisis bargaining model, I show that strong states can reduce the risk of war by making themselves weaker without reducing their demands. The key to this result is a comparative advantage that allows stronger types to fight more effectively with handicaps. This allows for an equilibrium where (1) stronger states adopt larger handicaps, thereby revealing their strength to the receiver, (2) larger handicaps are more likely to deter the receiver, and, (3) the positive risk of war precludes weaker types from imitating handicap signals. The ability to reveal strength peacefully has important ramifications for theories of mutual optimism, war termination, and the relationship between parity and war incidence.

In the presence of incomplete information, strong states have an incentive to invest in costly signals that can differentiate them from weaker states. I argue that states can signal strength by handicapping themselves, deliberately reducing their combat effectiveness. In an ultimatum crisis bargaining model, I show that strong states can reduce the risk of war by making themselves weaker without reducing their demands. The key to this result is a comparative advantage that allows stronger types to fight more effectively with handicaps. This allows for an equilibrium where (1) stronger states adopt larger handicaps, thereby revealing their strength to the receiver, (2) larger handicaps are more likely to deter the receiver, and, (3) the positive risk of war precludes weaker types from imitating handicap signals. The ability to reveal strength peacefully has important ramifications for theories of mutual optimism, war termination, and the relationship between parity and war incidence.

This paper considers an electoral model in which an incumbent and a challenger have ideological policy preferences that are private information. The incumbent may bias pre-electoral policies to signal preferences to the electorate with the aim of affecting the outcome of the election. When the two candidates are of completely different types, such a policy bias can occur only in a moderate direction. However, when their possible types overlap, a policy bias can be created in either a moderate or an extreme direction.