Information Networks and Worker Recruitment
AbstractThis paper studies experimentally how the existence of social information networks affects the ways in which firms recruit new personnel. Through such networks firms learn about prospective employees' performance in previous jobs. Assuming individualistic preferences social networks are predicted not to affect overall labor market behavior, while with social preferences the prediction is that when bilaterally negotiated: (i) wages will be higher and (ii) that workers in jobs with incomplete contracts will respond with higher effort. Our experimental results are consistent with the social preferences view, both for the case of excess demand and excess supply of labor. In particular, the presence of information networks leads to more efficient allocations.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 707.07.
Date of creation: 15 Jun 2007
Date of revision:
Labor Markets; Information Networks; Worker Recruitment; Indirect reciprocity; Experiments;
Other versions of this item:
- C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-07-07 (All new papers)
- NEP-BEC-2007-07-07 (Business Economics)
- NEP-CBE-2007-07-07 (Cognitive & Behavioural Economics)
- NEP-EXP-2007-07-07 (Experimental Economics)
- NEP-SOC-2007-07-07 (Social Norms & Social Capital)
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