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Information Networks and Worker Recruitment

Jordi Brandts, Arthur Schram and Klarita Gërxhani

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: 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.

Keywords: Labor Markets; Information Networks; Worker Recruitment; Indirect reciprocity; Experiments (search for similar items in EconPapers)
JEL-codes: C90 J30 J40 (search for similar items in EconPapers)
Pages: 42
Date: 2007-06-15
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-exp and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:707.07

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