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Seinfeld Economics: The Invitations

by Linda Ghent

A strategic move is an action taken by a player outside the defined actions of the game in order to gain a strategic advantage and increase one's payoff.

A credible threat is a threat made by a player in a sequential game that would be in the best interest for the player to carry out.

Signaling is the idea that one party (termed the “agent”) credibly conveys some information about itself to another party (the “principal”). For example, in job-market signaling, (potential) employees send a signal about their ability level to the employer by acquiring certain education credentials. The informational value of the credential comes from the fact that the employer assumes it is positively correlated with having greater ability.

Seinfeld: The Invitations

George is anxious to get out of his impending marriage to Susan. Kramer suggests that he ask for a prenuptial agreement, knowing it will signal Susan that George isn't committed to the idea of marriage and pushing her to back out. But in order for George's action to be credible, going without a prenup must cost him something. Susan knows this and willingly signs, saying, “Prenup? I make more money than you do! Sure, I'll sign!”

from Seinfeld, Season 7 (1996)
Creator: Larry David & Jerry Seinfeld
Posted by Linda Ghent