Information cascades on the labor market
Dorothea Kübler and
Georg Weizsäcker
No 2001,86, SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes
Abstract:
A model of herding behavior on the labor market is discussed where employers only receive signals with limited precision about the workers' types, but can observe previous employers' decisions. In particular, we study a situation where the employer and the worker can influence the signal probabilities, in the sense that the employer tries to increase the precision of the signal about the worker's type whereas the worker tries to get a good signal, independent of her type. In a two-period model, we derive conditions for an equilibrium in which only down-cascades occur, i.e.e., the second employer does not hire a worker with a bad history even if he receives a favorable private signal about the worker's type, but he does follow his own signal if the worker's history is good.
Date: 2001
References: Add references at CitEc
Citations:
Downloads: (external link)
https://www.econstor.eu/bitstream/10419/62676/1/725944730.pdf (application/pdf)
Related works:
Journal Article: Information Cascades in the Labor Market (2003) 
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:zbw:sfb373:200186
Access Statistics for this paper
More papers in SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().