دانلود رایگان مقاله مصاحبه پرهزینه

Abstract

In this paper, we show how the interaction between costly screening and competition in decentralized markets may prevent efficient matching. We examine this phenomenon in a simple dynamic model of a professional labor market, where firms can pay a cost to interview applicants who have private information about their own ability. Inefficiencies arise when a firm decides not to interview potentially able candidates since it infers that sufficiently good candidates will be hired by more productive firms. This effect is robust to changes in the information structure of the market, but it can be mitigated by subsidizing screening costs.

6. Conclusion

In a simple model describing the interview process for professional labor markets, we have pointed out that inefficient unemployment may result if screening is costly and firms compete for workers. This occurs when applicants' types are private information and firms decide not to interview an applicant who was previously interviewed by a more productive firm. This could cause able applicants to go unemployed and productive vacancies to go unfilled. This effect applies to other markets as well, such as the housing market and credit market. Our work suggests several directions for future research. First, changing the setting to allow for strategic wage setting and idiosyncratic preferences among firms and applicants are natural extensions. Second, analyzing interview markets for non-entry level applicants poses interesting challenges. Third, it would be of interest to understand how applicants match with firms given the inefficiencies explored in the paper, potentially in a framework with directed search.