Adverse selection and unraveling in common-value labor markets
We investigate a common-value labor setting in which firms interview a worker prior to hiring. When firms have private information about the worker’s value and interview decisions are kept private, many firms may enter the market, interview, and hire with positive probability. When firms’ interview decisions are revealed, severe adverse selection arises. As a result, all firms except for the highest-ranked firm are excluded from the hiring process.
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- Chakraborty, Archishman & Citanna, Alessandro & Ostrovsky, Michael, 2010.
"Two-sided matching with interdependent values,"
Journal of Economic Theory,
Elsevier, vol. 145(1), pages 85-105, January.
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- Robin S. Lee & Michael Schwarz, 2009. "Interviewing in Two-Sided Matching Markets," NBER Working Papers 14922, National Bureau of Economic Research, Inc. Full references (including those not matched with items on IDEAS)
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