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Competitive Pressure and Job Interview Lying: A Game Theoretical Analysis

  • Midjord, Rune
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    We consider a job contest in which candidates go through interviews (cheap talk) and are subject to reference checks. We show how competitive pressure - increasing the ratio of "good" to "bad" type candi- dates - can lead to a vast increase in lying and in some cases make bad hires more likely. As the number of candidates increases, it becomes harder to in- duce truth-telling. The interview stage becomes redundant if the candidates, a priori, know each others' type or the result of their own reference check. Finally, we show that the employer can bene t from committing not to reject all the applicants.

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    File URL: http://hdl.handle.net/10810/8770
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    Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number 2012-14.

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    Date of creation: 2012
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    Handle: RePEc:ehu:dfaeii:8770
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    Order Information: Postal: Dpto. de Fundamentos del Análisis Económico II, = Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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    1. Glazer, J. & Rubinstein, A., 1997. "Debates and Decisions: On a Rationale of Argumentation Rules," Papers 17-97, Tel Aviv.
    2. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    3. Wei Ding & Elmar G. Wolfstetter, 2011. "Prizes and lemons: procurement of innovation under imperfect commitment," RAND Journal of Economics, RAND Corporation, vol. 42(4), pages 664-680, December.
    4. Vijay Krishna & John Morgan, 2001. "A Model Of Expertise," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 747-775, May.
    5. Heidhues, Paul & Lagerlof, Johan, 2003. "Hiding information in electoral competition," Games and Economic Behavior, Elsevier, vol. 42(1), pages 48-74, January.
    6. Archishman Chakraborty & Rick Harbaugh, 2006. "Persuasion by Cheap Talk," Working Papers 2006-10, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy, revised Oct 2009.
    7. Paul R. Milgrom & John Roberts, 1985. "Relying on the Information of Interested Parties," Cowles Foundation Discussion Papers 749, Cowles Foundation for Research in Economics, Yale University.
    8. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-83, December.
    9. Sylvain Bourjade & Bruno Jullien, 2011. "The roles of reputation and transparency on the behavior of biased experts," RAND Journal of Economics, RAND Corporation, vol. 42(3), pages 575-594, 09.
    10. Jacob Glazer & Ariel Rubinstein, 2004. "On Optimal Rules of Persuasion," Econometrica, Econometric Society, vol. 72(6), pages 1715-1736, November.
    11. Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August.
    12. Sher, Itai, 2011. "Credibility and determinism in a game of persuasion," Games and Economic Behavior, Elsevier, vol. 71(2), pages 409-419, March.
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