A Strategic Selection Procedure

Toru Suzuki

No 2011-013, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: A decision maker (DM) wishes to select a competent candidate to fill a position. However, since the wage and task of the position is predetermined, the DM cannot use contract as a screening device. This paper formulates the problem as a class of selection problem and derives the optimal selection procedure. The key element of our selection procedure is voluntary testing. That is, unlike statistical selection procedures, the signal generating process is endogenous. Then, the optimal selection rule takes into account not only the test performances but also signaling element of the test. We analyze the selection procedure as a signaling game and derive the optimal selection rule. Moreover, the optimal size of candidate pool and the selection efficiency are also analyzed. It is shown that, by making the test voluntary, the selection efficiency can be dramatically improved.

Keywords: Signaling; Screening; Selection problem; Selection procedure; Testing (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
Date: 2011-03-08
New Economics Papers: this item is included in nep-cta
References: Add references at CitEc
Citations:

Downloads: (external link)
https://oweb.b67.uni-jena.de/Papers/jerp2011/wp_2011_013.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2011-013

Access Statistics for this paper

More papers in Jena Economics Research Papers from Friedrich-Schiller-University Jena
Bibliographic data for series maintained by Markus Pasche ().