Interviews and Adverse Selection

Joel Shapiro and Jens Josephson

No 6837, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Interviewing in professional labour 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 first best can be achieved using either a mechanism with transfers or one without transfers.

Keywords: Asymmetric information; Decentralized labour markets; Interview costs; Matching; Professional labour markets (search for similar items in EconPapers)
JEL-codes: D82 J21 J44 (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-cta
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://cepr.org/publications/DP6837 (application/pdf)

Related works:
Working Paper: Interviews and Adverse Selection (2015)
Working Paper: Interviews and adverse selection (2008)
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:cpr:ceprdp:6837

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6837

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().