Interviews and Adverse Selection

Jens Josephson and Joel Shapiro

No 349, Working Papers from Barcelona School of Economics

Abstract: Interviewing in professional labor 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; matching; Decentralized Labor Markets; Professional Labor Markets; Interview costs (search for similar items in EconPapers)
JEL-codes: D82 J21 J44 (search for similar items in EconPapers)
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Interviews and Adverse Selection (2008)
Working Paper: Interviews and adverse selection (2008)
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