The engagement game

Abstract

Engagement is a costly social institution for which virtually no economic analysis exists. We explore the information gathering function of engagement in a game with a proposer who offers a long or short engagement, and a respondent, who may reject the proposal at various stages. Whether the proposer is a suitable match is uncertain, but a long engagement yields information with which the respondent can update prior probabilities. We consider pooling, separating and mixed strategy equilibria and relate our findings to the evolving institution of engagement and institutional circumstances that will improve its efficiency in generating successful matches.