Interviews and Adverse Selection
AbstractInterviewing in professional labor markets is a costly process for firms. Moreover, poor screening can have a persistent negative impact on firms bottom lines and candidates careers. In a simple dynamic model where firms can pay a cost to interview applicants who have private information about their own ability, potentially large inefficiencies arise from information-based unemployment, where able workers are rejected by firms because of their lack of offers in previous interviews. This effect may make the market less efficient than random matching. We show that the rst best can be achieved using either a mechanism with transfers or one without transfers.
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Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 349.
Date of creation: May 2008
Date of revision:
Decentralized Labor Markets; Professional Labor Markets; Asymmetric Information; Interview costs; Matching;
Other versions of this item:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
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