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Information Networks and Worker Recruitment

This 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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File URL: http://pareto.uab.es/wp/2007/70707.pdf
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Paper 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.

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Length: 42
Date of creation: 15 Jun 2007
Date of revision:
Handle: RePEc:aub:autbar:707.07
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  1. van Ours, J.C. & Ridder, G., 1992. "Vacancies and recruitment of new employees," Other publications TiSEM 9acc708a-0885-46a2-aef5-7, Tilburg University, School of Economics and Management.
  2. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
  3. Kirchsteiger Georg & Alós-Ferrer Carlos, 2003. "Does Learning Lead to Coordination on Market Clearing Institutions?," Research Memorandum 053, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  4. Bontemps, C. & Robin, J.M. & van den Berg, G.J., 1998. "Equilibrium Search with Continuous Productivity Dispersion: Theory and Non-Parametric Estimation," Papers 98-07, Centre for Labour Market and Social Research, Danmark-.
  5. Eguchi, Kyota, 2005. "Job transfer and influence activities," Journal of Economic Behavior & Organization, Elsevier, vol. 56(2), pages 187-197, February.
  6. Bentolila, Samuel & Michelacci, Claudio & Suarez, Javier, 2004. "Social Contacts and Occupational Choice," CEPR Discussion Papers 4308, C.E.P.R. Discussion Papers.
  7. Ernst Fehr & Georg Kirchsteiger & Arno Riedl, 2003. "Gift Exchange and Reciprocity in Competitive Experimental Markets," Labor and Demography 0305002, EconWPA.
  8. Georg Kirchsteiger & Muriel Niederle & Jan Potters, 2005. "Endogenizing Market Institutions: An Experimental Approach," ULB Institutional Repository 2013/149583, ULB -- Universite Libre de Bruxelles.
  9. Albrecht, James W & Axell, Bo, 1983. "An Equilibrium Model of Search Unemployment," Working Paper Series 99, Research Institute of Industrial Economics.
  10. van Ours, Jan & Ridder, Geert, 1991. "Cyclical variation in vacancy durations and vacancy flows : An empirical analysis," European Economic Review, Elsevier, vol. 35(5), pages 1143-1155, July.
  11. van Ours, J.C. & Lindeboom, M. & Renes, G., 1994. "Matching Employers and Workers : an Empirical Analysis on the Effectiveness of Search," Other publications TiSEM 3ada67c1-145c-42d0-8726-f, Tilburg University, School of Economics and Management.
  12. Gorter, Cees & Nijkamp, Peter & Rietveld, Piet, 1993. "The Impact of Employers' Recruitment Behaviour on the Allocation of Vacant Jobs to Unemployed Job Seekers," Empirical Economics, Springer, vol. 18(2), pages 251-69.
  13. repec:dgr:uvatin:20020094 is not listed on IDEAS
  14. R. Lynn Hannan & John H. Kagel & Donald V. Moser, 2002. "Partial Gift Exchange in an Experimental Labor Market: Impact of Subject Population Differences, Productivity Differences, and Effort Requests on Behavior," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 923-951, October.
  15. Cees Gorter & Jos Van Ommeren, 1999. "Sequencing, timing and filling rates of recruitment channels," Applied Economics, Taylor & Francis Journals, vol. 31(10), pages 1149-1160.
  16. Milgrom, Paul R., 1987. "employment contracts, influence activities and efficient organization design," Department of Economics, Working Paper Series qt6pf6c5j6, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  17. Engelmann, Dirk & Fischbacher, Urs, 2009. "Indirect reciprocity and strategic reputation building in an experimental helping game," Games and Economic Behavior, Elsevier, vol. 67(2), pages 399-407, November.
  18. Fehr, Ernst & Kirchsteiger, George & Riedl, Arno, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 437-59, May.
  19. Jordi Brandts & Gary Charness, 2004. "Do Labour Market Conditions Affect Gift Exchange? Some Experimental Evidence," Economic Journal, Royal Economic Society, vol. 114(497), pages 684-708, 07.
  20. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
  21. Davis, Douglas D. & Harrison, Glenn W. & Williams, Arlington W., 1993. "Convergence to nonstationary competitive equilibria : An experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 22(3), pages 305-326, December.
  22. Lindeboom, Maarten & van Ours, Jan C & Renes, Gusta, 1994. "Matching Employers and Workers: An Empirical Analysis on the Effectiveness of Search," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 45-67, January.
  23. repec:ner:tilbur:urn:nbn:nl:ui:12-142172 is not listed on IDEAS
  24. Neugebauer, Tibor & Poulsen, Anders & Schram, Arthur, 2008. "Fairness and reciprocity in the Hawk-Dove Game," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 243-250, May.
  25. Holzer, Harry J, 1988. "Search Method Use by Unemployed Youth," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 1-20, January.
  26. Michael Kosfeld & Armin Falk, 2006. "The Hidden Costs of Control," American Economic Review, American Economic Association, vol. 96(5), pages 1611-1630, December.
  27. Edmund S. Phelps, 1968. "Money-Wage Dynamics and Labor-Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 76, pages 678.
  28. Martin Brown & Armin Falk & Ernst Fehr, 2004. "Relational Contracts and the Nature of Market Interactions," Econometrica, Econometric Society, vol. 72(3), pages 747-780, 05.
  29. repec:ner:tilbur:urn:nbn:nl:ui:12-142203 is not listed on IDEAS
  30. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  31. Ken Burdett & Dale T. Mortensen, 1979. "Search, Layoffs, and Labor Market Equilibrium," Discussion Papers 380, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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  33. Tamar Kugler & Zvika Neeman & Nir Vulkan, 2003. "Markets Versus Negotiations: An Experimental Investigation," Discussion Paper Series dp319, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
  34. van Ours, Jan & Ridder, Geert, 1992. "Vacancies and the Recruitment of New Employees," Journal of Labor Economics, University of Chicago Press, vol. 10(2), pages 138-55, April.
  35. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
  36. McCall, John J, 1970. "Economics of Information and Job Search," The Quarterly Journal of Economics, MIT Press, vol. 84(1), pages 113-26, February.
  37. repec:dgr:uvatin:20010003 is not listed on IDEAS
  38. Gary E. Bolton & Elena Katok & Axel Ockenfels, 2004. "How Effective Are Electronic Reputation Mechanisms? An Experimental Investigation," Management Science, INFORMS, vol. 50(11), pages 1587-1602, November.
  39. Piet Rietveld & Cees Gorter & Peter Nijkamp & Giovanni Russo, 2000. "Recruitment channel use and applicant arrival: An empirical analysis," Empirical Economics, Springer, vol. 25(4), pages 673-697.
  40. Holt, Charles A & Langan, Loren W & Villamil, Anne P, 1986. "Market Power in Oral Double Auctions," Economic Inquiry, Western Economic Association International, vol. 24(1), pages 107-23, January.
  41. van Ours, J.C. & Ridder, G., 1991. "Cyclical Variation in Vacancy Durations and Vacancy Flows : An Empirical Analysis," Other publications TiSEM 316776e1-eb88-42a7-9296-0, Tilburg University, School of Economics and Management.
  42. Falk, Armin & Fehr, Ernst, 2003. "Why labour market experiments?," Labour Economics, Elsevier, vol. 10(4), pages 399-406, August.
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